This Week in Healthcare IT

M&A, Financial Reports and Funding

Health plan Aetna has acquired health information exchange services provider Medicity for approximately $500 million…NaviNet, a health care communications network, has acquired Prematics, a mobile care management program provider, for an undisclosed amount…IT services company Computer Sciences Corp. plans to acquire Image Solutions, a privately held IT outsourcing company, for an undisclosed sum…Lippincott Williams & Wilkins, a unit of business intelligence provider Wolters Kluwer Health, has acquired iCare, an EHR vendor...Verge Solutions, a health care software developer, has acquired Peminic, a provider of patient safety and risk management software, for an undisclosed sum.
OnShift -- a health care staff scheduling and shift management software vendor -- has raised $2.3 million in a round of venture capital investment.

Contracts

South Carolina Oncology Associates has chosen Kryptiq's online bill pay program…Lutheran Medical Center in New York has implemented an EHR system from Medsphere Systems… Dunlap Community Hospital, Wooster Community Hospital and more than a dozen physician practices in Ohio have implemented GE Healthcare's information exchange system with the aid of central Ohio's health information exchange eLINCx…the University of Colorado Hospital has chosen an integration and development platform from InterSystems…Scottsdale Healthcare, a not-for-profit health system in Arizona, has selected e-health services from Stat Health...GuideNet, a managed care program, has selected a medication management system from American Medical Alert.
Providence Care in Canada has chosen an EHR system from QuadraMed…Berkshire Health Systems in Massachusetts has deployed EHR and practice management systems from Allscripts…Ohio-based Children's Medical Center of Dayton has selected Medicity to run its health information exchange…Mission Hospital in California has selected workflow technology from CenTrak…Central Baptist Hospital in Kentucky has chosen interactive patient education software from TeleHealth Services...HealthCare Partners Medical Group in California has selected RIS/PACS technology from DR Systems...Iowa Health System has selected LUMEDX's cardiovascular image and data management software.

Product Development and Marketing

iMDsoft's integrated perioperative application will offer technology from Anesthesia Business Consultants…Surrex EHR Solutions, a health IT consultancy, will implement gloStream's EHR platforms at U.S. physician offices...lifeIMAGE has integrated its medical image exchange network with PHR technology from Microsoft...Nuance Communications has combined its radiology report databases with Montage Healthcare Solutions' search and performance analytics technology.

Personnel

Amy Gibson -- former assistant director of the Boys Town Institute for Child Health Improvement in Nebraska -- has been named COO of the Patient-Centered Primary Care Collaborative…Michael Meehan -- former health care sales representative for Sunnyside Design Group in Illinois -- has been named Midwest regional sales director for health IT network provider Curaspan Health Group…Joseph Heins -- former executive vice president and COO of anesthesia information system provider DocuSys -- has been named vice president, global product management and marketing of First DataBank…William Sorrells -- former senior director at Evolvent Technologies, a health IT services firm -- has been named executive director of the Alaska eHealth Network.
Interactive Technology Solutions, a management and consulting firm, has named Todd Stottlemyer -- executive vice president of corporate services for Inova Health System in Virginia -- as CEO and Tom Weston -- former CFO of technology provider QinetiQ North America -- as CFO…Brian Tyler -- current president of McKesson Medical-Surgical unit -- has been appointed president of McKesson U.S. Pharmaceutical; John Figueroa -- president of McKesson U.S. Pharmaceutical -- has been named CEO and company director of pharmaceutical company Omnicare...John Wallace, former senior vice president at patient payment vendor mPay Gateway, has been named to the business development team at MED3000, a health care management and IT company.


Read more: http://www.ihealthbeat.org/articles/2010/12/10/health-it-business-news-roundup-for-the-week-of-december-10-2010.aspx#ixzz18JZqol8N

This Week in Healthcare IT

M&A, Financial Reports and Funding
Roche Diagnostics will acquire assets related to Medical Automation Systems' point-of-care technology connectivity system…Management Health Solutions, a health IT software provider, has acquired Hospital Inventories Specialists, a provider of inventory management programs, for an undisclosed sum...Xerox's Affiliated Computer Services division has acquired pharmaceutical teleservices company TMS Health from private-equity firm Palm Beach Capital for an undisclosed amount...Greenway Medical Technologies, a developer of EHR software for physician practices, has acquired PACS technology and other assets from VisualMED, an imaging conversion and communications firm, for an undisclosed sum.

Contracts
OB/GYN Women Specialists of Georgia has selected an EHR and practice management system from Waiting Room Solutions…the U.S. Department of Defense has selected health care revenue and payment cycle management software provider Emdeon, along with CSC, to provide health IT services on behalf of the agency's Pharmacy Data Transaction Service; DOD also has entered into a contract with Carestream Health, a provider of imaging and health IT applications, to allow the agency to order PACS...U.S. Tele-Medicine, a telehealth services provider, has selected a telehealth device from Intel for its chronic care management programs.
The Office of the National Coordinator for Health IT has chosen consulting and business process services firm Vangent for work on several health IT initiatives...HHS' Office of the Assistant Secretary for Planning and Evaluation has selected Thomson Reuters to develop a secure, interactive research tool to help researchers perform comparative effectiveness studies…St. Charles Health System in Oregon has selected Allscripts' EHR and practice management applications…Illinois Bone & Joint Institute has selected an EHR system by SRS…CDC has selected CACI International to perform some of its health IT infrastructure work.
North American Medical Management California and MSO of Puerto Rico have selected a clinical software platform from AxSys Technology…Parkview Health System in Indiana has chosen communication technology provider Voalte to manage its wireless communication…Alliance HealthCare Services, a provider of advanced outpatient diagnostic imaging services, and Texas Health Resources have chosen Sy.Med's credentialing software…Rebound Orthopedics in Washington state and Kansas Joint and Spine Institute have selected health IT services from Ancillary Care Solutions, which helps overhaul physical and occupational therapy programs...Saint Francis HealthCare Partners in Connecticut will implement care coordination and population health management technology from Phytel.
The New Jersey Health IT Extension Center has chosen ITelagen's EHR software…Evangelical Community Hospital in Pennsylvania has selected IT applications from Keane…Nebraska Medical Center has subscribed to CapSite's online database of health care technology pricing and packaging…Palmetto Physician Connections, a South Carolina-based patient-centered medical home network, has selected software from MedHOK to secure information exchange and improve care quality and coordination.

Product Development and Marketing
Information services provider Ingenuity Systems has partnered with TransMed Systems, a translational medicine software and services company, to integrate pre-clinical and clinical data with analysis tools…C PORT Solutions has partnered with Rubbermaid Medical Solutions and St. Joseph Hospital's Translational Research Institute to unite communication and collaboration between patient data, medical applications and existing health care technologies.
Health care IT company TriZetto Group has entered into a partnership with Edifecs, a health care interoperability program provider, to help payers meet HIPAA 5010 compliance...AirStrip Technologies, a mobile medical software developer, has partnered with telecommunications company Sprint to work on transmitting health care data to mobile devices of medical professionals.

Personnel
Bart Bernstein -- an Arizona pediatrician -- has been named chief medical information officer at Yuma Regional Medical Center…Christopher Mackie -- former program officer for the Program in Research in IT at the Andrew W. Mellon Foundation -- has been named executive vice president and chief innovation officer at health care IT trade association Open Health Tools…Telehealth company Teladoc has named Michael King --- former sales executive at Healthways, a well-being improvement company -- as chief sales officer and Peter Bacon -- former vice president of business alliances at insurer Assurant Health -- as senior vice president of business development.
Timothy Mills -- former senior vice president of provider operations with NaviNet, a health care communications network -- has been named vice president of sales and marketing for revenue cycle management software and services provider Avisena…Eric Rosenfeld -- former senior vice president of IT for the wellness division of BlueCross BlueShield of Tennessee -- has been named CIO of health IT company DrFirst.


Read more: http://www.ihealthbeat.org/articles/2010/10/22/health-it-business-news-roundup-for-the-week-of-october-22-2010.aspx#ixzz13aDlNGK8

Planning for tomorrow's EHR

by Patty Enrado, Special Projects Editor and blogger for EHRWatch.com

After reading an article on the five key features of tomorrow's EHR, I wondered how the current EHR products are going to transition to meet the demands of healthcare providers and patients.

In another five years, as EHR adoption grows, we are likely to see consumers wanting their patient data and tests electronically delivered in real time, coordination among their providers, and the ability to conduct many healthcare-related transactions online.
As for the provider community, the next crop of medical school graduates and residents will expect the portability and access of patient data, which will give them greater efficiency and provide them with quality of life through the new model of practicing medicine without walls.

The five key features are things we are seeing in today's market. The users are early adopters of health IT. Mobile computing is definitely emerging already in large health systems such as the University of Kansas hospital and Vanderbilt University Medical Center. The concept of delivering safe, quality care anywhere will really resonate with time- and resource-strapped physicians.

Data liquidity via interoperability will have a bigger role in the second and third stages of meaningful use criteria. Every vendor should be working toward meeting this goal, so it's safe to say this is one area that healthcare providers shouldn't have to worry about with regard to their EHR system.

Easy maintenance is another requirement. As the market has heated up in the last two years, I think it's safe to say that the massive EHR implementation with consultants and expensive upgrades and maintenance costs will no longer be tolerated by healthcare providers who are looking for cost-effective solutions. If the EHR vendor has a lot of upgrades and maintenance after the initial implementation, buyer beware. Products have evolved. Expect that from your vendor.

Scalability and the user-friendliness are also two things that one should expect as the norm for even current products. If it can't scale, it's useless to healthcare organizations now. If it isn't intuitive to use, you won't get physician adoption. It's that simple.

The question mark is which products and EHR vendors will meet those demands. How do you know your chosen or implemented EHR system will make that transition seamlessly? It helps if you have a trusted relationship with your vendor.

For those who are getting into the game now, ask a lot of questions. I was at a health IT vendor's user conference a few weeks ago, and I was talking with someone who was working on a statewide HIE initiative. We were trading thoughts about EHRs, and she said she wanted to know why EHRs cost so much. Good question. Will the market demand either drive prices up or the competition bring prices down? Whatever the case, healthcare providers should ask the question to all vendors they are considering.

Not-for-profits see improved operating margins:Fitch

By Melanie Evans, taken from www.modernhealthcare.com

Fitch Ratings said operating margins improved in 2009 for not-for-profit hospitals and health systems, regardless of overall credit strength. The median operating margin was 2.8% among the 244 not-for-profit hospitals and systems included in the ratings agency's yearly report on key financial measures, up from 2.2% the prior year and 2.6% in 2007.

Fitch also noted a key capital spending ratio declined 18% in 2009 and said the two trends—improved operations and tighter capital spending—helped boost cash reserves along with investment gains. The number of days that reserves could fund operations climbed to 166.8 days from 151.6 days the prior year.

The hospitals and systems' operating gains were as a result of cost cutting, collecting more from patients, reduced bad debt and lower interest rate costs.
 
The rating agency said operating income before subtracting capital costs rebounded as well, but it questioned long such performance could last. “Whether such improvements can be sustained as the sector moves towards a more restrictive reimbursement environment remains to be seen,” the Fitch report said, “but, thus far, the sector has demonstrated a surprising ability to maintain operating profitability, especially with many hospitals experiencing declining volumes and rising uncompensated care.” The ratings agency said it continues to consider the sector's outlook negative.

Regional GPOs work to offer value, services that their national counterparts often don't provide

by Shawn Rhea courtesy of modernhealthcare.com

When regional group purchasing organizations consolidated into a handful of national groups throughout the 1980s and '90s, the moves were largely based on a belief that healthcare providers leverage better pricing when large organizations band together to contract with suppliers.

But recent efforts by organizations such as the Colorado Hospital Association, Illinois Hospital Association and a group of providers in Kansas and Missouri to establish new regional GPOs suggest a growing number of healthcare providers are finding value in the nimbleness of smaller groups that share more aligned purchasing and supply-chain goals.

“When you boil down to the local level, we make every attempt to create a face-to-face relationship with our customers in a way a national GPO might not be able to,” says Jerry Welsh, president and CEO of Hospital Purchasing Service, a regional GPO serving 128 hospitals plus 1,100 alternate sites such as nursing homes and physician offices in the Great Lakes area.

Bob Meling, senior vice president and chief operating officer for Associated Purchasing Services, a regional GPO that serves 122 hospitals and nearly 400 alternate-site facilities in Kansas and Missouri, offered similar perspective. “A lot of the hospitals outside of the Kansas City area are critical-access with 25 beds or less,” he says. “The nationals can't afford to do hands-on servicing of those facilities. Our people are willing to drive seven hours to sit down and walk them through the contracts and make sure they're getting savings.”

Such enhanced service opportunities are part of the incentives driving the creation of regional GPOs in areas where providers see a chance for greater savings and supply-chain efficiencies through local affiliations. While none of the newly established regional GPOs Modern Healthcare spoke with was far enough along in development to submit a response to our 2009 Group Purchasing Survey, four of the 11 GPOs that did participate in the survey were regionals: Mid-Atlantic Group Network of Shared Services, Hospital Purchasing Service, Associated Purchasing Services and Resource Optimization & Innovation.

As in previous years, Irving, Texas-based Novation ranked highest in purchasing volume among the GPOs that reported this information. Members of that organization bought nearly $35.8 billion in contracted healthcare supplies and services in 2008 and are expected to buy just under $36 billion in 2009. Resource Optimization & Innovation, which ranked fifth in purchasing volume with members buying $580 million in contracted goods and services in 2008 and expected to buy $652 million in 2009, ranked highest among the regional GPOs reporting in this category.

With 750 hospitals among its membership, Mid-Atlantic Group Network ranked highest among regional GPOs in the hospital membership category and came in fifth overall based on the number of hospitals. Novation again reported the highest GPO membership, with 2,533 hospitals.

Overall, projected purchasing-volume growth appears to be trending steady for both regional and national GPOs during a year in which hospitals have been plagued by spending cuts. Outliers include Consorta, whose purchasing volume is expected to fall from $943 million in 2008 to $340 million in 2009 as a result of its membership being switched over to HealthTrust Purchasing Group following a merger of the organizations in 2007. Associated Purchasing Services also expects to see purchasing volume fall from $55.6 million in 2008 to $42 million in 2009.

Regional GPOs are re-emerging largely because national supply-chain organizations are acknowledging they have limited influence on their members' use of negotiated contracts, and that it's impossible for centralized organizations to address the idiosyncratic needs of their members. In their newest incarnation, regional GPOs are not competitors but partners to national purchasing organizations. Their efforts are synergistic, supply-chain experts say.

“We view our (regional) GPO as having the ability to negotiate local contracts for our members, and we have MedAssets to negotiate the large, national contracts,” says Steven Summer, president and CEO of the Colorado Hospital Association, which in June 2007 began working with MedAssets to create a regional purchasing group.

The association is hardly unique in its partnership with a national GPO. In fact, unlike a couple of decades ago when regional GPOs stood on their own, the vast majority are now affiliates of large national supply-chain organizations like MedAssets, Novation and Premier. In many cases, national GPOs are in fact supporting the formation of regional purchasing groups.

Mike Alkire, president of Premier Purchasing Partners, says his GPO has dedicated staff members who assist regional groups with administrative work and work on spending analysis, among other services. Alkire says the partnership between Premier and its 19 regional purchasing groups has to date brought an additional $15 million in savings to members during fiscal 2009.

The financial arrangements for regional GPOs vary, with some like the Colorado Hospital Association's being for-profit organizations that are paid fees for bringing new members and business to the national GPOs. Others like Hospital Purchasing Service and Mid-Atlantic Group Network are not-for-profit organizations. Some regional GPOs also charge membership fees. Associated Purchasing Services, for example, charges annual membership fees of $1,100 to $5,000 per year based on the number of staffed beds a member facility has.

“Regional contracting by itself probably doesn't deliver better cost controls than national contracting,” says Pat Sonin, COO of the Premier-affiliated Illinois Purchasing Collaborative, a regional GPO launched in May 2006 by the Illinois Hospital Association. “But if you put regional contracting efforts on top of the national contracts and write contracts for regional suppliers and services that the nationals don't offer, well then that's where I think you find real value.”

Taylor White, senior vice president of supply networks for Novation parent company VHA, says regional GPOs help drive providers' front-end commitment to contracts. He notes that Novation is currently working with 30 regional purchasing groups as a means of addressing contract commitment on a more intimate level. “Every time you get a group of hospitals together, each one has a different desire in terms of the level of commitment they want” to give to contract purchases, he says.

Christopher O'Connor is executive vice president of GNYHA Ventures, a Premier-affiliated regional GPO that serves members of the Greater New York Hospital Association. O'Connor says his hospitals are able to realize even greater savings by aggregating their contract purchases and buying at high-volume tiers that providers could not reach as individual hospitals or systems.

“What we do is work with all our members to get them to that top tier,” O'Connor says. “We can say, ‘All our hospitals will commit to buying from a particular supplier.' That way, the supplier views all of us as one entity, and our small hospitals will be put into the system” at top-tier pricing.

O'Connor says confidentiality agreements prevent him from detailing any specific savings his members have received as a result of regional aggregation, but he does say “savings are all over the map” and have on occasion been 20% greater than what the national GPO originally negotiated.

The benefits of regional GPOs can go beyond aggregated purchasing power, VHA's White says. “The other value that groups are trending toward is not just contracting, but also, how do they implement certain standards in their regions so that they can be more effective and eliminate certain redundancies?”

That's precisely the thinking that brought together providers to form Mid-America Service Solutions, says Dale Montgomery, vice president of 147-bed Hays (Kan.) Medical Center—one of the hospitals involved in the partnership.

Formed this past January, Mid-America consists of provider investors in Kansas and Missouri that are attempting to save money not only through aggregated purchasing, but also through shared order processing, distribution, warehousing and invoice processing.

“It's a limited liability corporation formed by six hospitals,” Montgomery says. “We have a group of about 90 to 100 affiliated hospitals that we eventually want to bring into the organization.”

The investors—which in addition to Hays include two-hospital CoxHealth, Springfield, Mo.; 11-hospital St. Luke's Health System, Kansas City, Mo.; two-hospital Freeman Health System, Joplin, Mo.; 219-bed Salina (Kan.) Regional Health Center; and 348-bed Stormont-Vail HealthCare, Topeka, Kan.—provided $1.5 million in seed money to fund the effort. Mid-America partnered with VHA on the project since all six providers were already members of Novation.

Under the partnership, VHA is providing Mid-America with a shared information technology platform that will process orders and route the product delivery. The system essentially treats the hospitals' purchases from any one supplier as a single order, allowing the providers to automatically aggregate their purchases. It also allows members to seek out a vendor's lowest price and best contract terms from among the six providers.

“If we found a price in any of the systems that were better at one hospital than the others, we went back to the manufacturer and said, ‘We want best pricing,' ” Montgomery says.

The purchases will also ship as a single order to a central warehouse in Kansas City, Mo. Mid-America has contracted with distributor Owens & Minor to store the goods until the member hospitals are ready for them to be shipped to individual locations.

A group order from any one supplier will also be paid as a single invoice, Montgomery says, but the hospitals aren't billed until they pull products from the Mid-America central inventory. “With all our orders going in through the same system, we'll have a really good sense of actual use,” he says.

Montgomery says warehousing and shipping supplies as a single organization, along with aggregating its contracted purchases, should help Mid-America shave about $2 million off its members' supply-chain costs this year. The collective expects those savings to increase as they improve efficiencies and add members.

To maximize savings opportunities, Mid-America will require all of its members to make at least 85% of their purchases through the regional collective, Montgomery says. And while the group has chosen to partner with VHA/Novation, it isn't obligated to use those contracts, according to Montgomery. “If we think we can negotiate a better agreement, or if Novation doesn't offer a product or service, then we'll go out and negotiate” its own agreement.

Montgomery says Mid-America is currently considering negotiating a contract with a local IT equipment supplier and that it has already negotiated a regional contract for customized procedure trays.

Other regional GPOs are also looking beyond their roles as agents for national GPOs, and are negotiating contracts with local suppliers. “There are a number of contracts that are best done regionally,” says Meling of Associated Purchasing Services. “Something like medical gas—that's a difficult contract to manage, and a national group will often choose a solution that's excellent for delivery to a metro area, but not for a rural area. When you negotiate regionally, you can adapt and secure favorable terms that blend the region's characteristics.”

Welsh of MedAssets-affiliated Hospital Purchasing Service echoed Meling's assertion, saying that while national GPOs can secure best pricing for a number of supplies, some items such as perishable food, equipment maintenance and medical-waste removal are typically offered through local and regional businesses that, out of necessity, limit their geographical customer base.

“National GPOs tend to limit contracting to large national vendors,” Welsh says. “But by us being able to fill a truck that travels on a regional basis, we can offer an economy of scale” to local vendors. As a result, Hospital Purchasing Service offers its members several contracts with suppliers that were negotiated independent of MedAssets. They include, according to Welsh, a contract with a local medical-surgical supplier for gloves, wound-care and other products used by Hospital Purchasing Services' alternate-care members.

Illinois Purchasing Collaborative's Sonin says his group also engages in direct contracting. “We've gone outside in one case on an office-supply agreement because we found better value than what we could get through Premier. We also went outside to get a contract for printing services, which weren't really covered by Premier.” According to Sonin, the 88 regional contracts negotiated by the collaborative provide members with an average savings of about 13% greater than what they would get through Premier-negotiated contracts.

But even while regional purchasing groups engage in their own contracting, it is unclear exactly how independent these organizations are of their national affiliates and whether if, as a single entity, any of them wield enough power to get providers within their organization to move with them should they decide they could be better served by another affiliation or by going it alone.