October 2007

Rank Profits?

From PRing doctor-ranking companies Subimo, Best Doctors and HealthShare Technology, I figured it was only a matter of time before MCOs would use transparency altruism to mask ulterior profit motives.  NY Attorney General Andrew Cuomo seems to think so, calling last week on NY health plans to halt doctor ranking programs. He also directed Empire BBCBS to disclose their criteria in doctor rankings.

Information from the press release: In an expanding industry-wide investigation, New York Attorney General Andrew M. Cuomo today issued letters to Empire Blue Cross Blue Shield, Preferred Care, and HIP Health Plan of New York/GHI requesting information on the insurers' doctor ranking programs. The Attorney General also alerted New Yorkers about potentially deceptive programs driven by financial motives and not consumers' best interests.

"Consumers need to be aware that doctor ranking programs as currently designed may steer patients to the cheapest, but not necessarily the best doctors, letting profits trump quality," said Attorney General Andrew Cuomo. "Transparency and accurate information are critical when making health care decisions and should not be clouded by conflicts of interest."

To read on, hit the "Continue Reading" link... In the three separate letters sent today, Attorney General Cuomo said:

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Posted by Shawn Whalen on October 26, 2007 at 4:29 PM
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Outsourcing - What's the Big Deal?

Today's New York Times article on outsourcing by the State Department should be no surprise. Outsourcing, business process outsourcing, smart sourcing - whatever you want to call it, contracting out services is a business mainstay and fundamental. 

Healthcare is no different, though of course few people like to talk about. Privacy concerns abound. The reality is there's not much privacy to begin with and outsourcing will continue to grow.

In healthcare, offshore outsourcing is commonly used for claims processing, customer service, medical transcription and billing services. However, as certain clinical areas experience talent shortages amidst rising demand, healthcare providers are looking for more outsourcing solutions.

According to research firm IDC, nearly $322 million was spent on offshore healthcare services in 2005. They project a 79% increase to $575 million in 2008.

According to public data, among those managed care organizations that do offshore outsourcing are Aetna, BCBS Michigan, BC of N. PA, Cigna, Coventry, Horizon BCBS, Humana, Kaiser Permanente, Regence Group, United Health, WellCare, Wellpoint/Anthem and others.

According to U.S. Government Accountability Office (GAO) reports, 19 percent of Medicare Advantage contractors do offshore data transfers as part of outsourcing. Four percent of Medicare FFS contractors do so, and 2 percent of state Medicaid agency contractor vendors do so.

Posted by Shawn Whalen on October 24, 2007 at 12:01 PM
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Newt on Hilary

Speaking of politicians, Newt Gingrich has been making some noise again. I thought his David Merritt-ghosted Oct. 15 National Review Online article (link) on Hilary Clinton healthcare proposals somewhat interesting. The disgraced former Speaker for the House, the only Speaker to ever be fined for ethical misconduct, runs the for-profit pseudo-think tank Center for Health Transformation. I'm not going to rehash the many criticisms media such as the Associated Press and blogs have heaped on his corporate sponsor pay-for-play issue support scheme.

Posted by Shawn Whalen on October 21, 2007 at 10:52 AM
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Presidential Candidates on HCIT

The EMR Medical Software Information and Resources blog has a useful summary of the Presidential candidates position on healthcare IT. For the convenience of the healthcare IT marketers and PR folks that read this blog, I'll include it here.
 
Election day is more than twelve months away, but the contest for president of the United States is already shaping up to be a fierce one. Many presidential candidates have either released or announced their intention to release a comprehensive plan for health care reform. Following is an attempt to summarize each candidate's position on health care information technology such as e-prescribing and electronic medical records. You are encouraged to visit each candidate's Web site on your own, as their positions may change in the future. Please hit "Continue Reading" for the details...

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Posted by Shawn Whalen on October 19, 2007 at 2:52 PM
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Hospital IT Spend Trends

We represent here Leerick Swann & Company, a boutique healthcare equity research company. From time to time I'll share research of interest to healthcare IT marketers.

Healthcare IT - Hospitals Remain Committed to IT Spend Through 2008

·  HCIT Investment Remains a Top Priority at Hospitals - A recent MEDACorp survey indicates that 24% of surveyed hospitals maintained that healthcare IT and related spending will be their top capital expenditure priority in 2008. The survey of 61 hospitals asked the hospitals to rank-order their priority for capitals expenditures in 2008 -- 24% ranked IT and technology-related spending as their No. 1 priority, 23% of hospitals ranked IT at No. 2, and 21% of hospitals ranked IT at No. 3. On average, hospital IT budgets are expected to increase 6% in 2008, compared with 12%E in 2007.

•  Where We Believe the Money Will Go - We believe that hospitals will continue to spend significant portions of their budget on information technology. Beginning in 2008, we believe investors could begin to see a shift in dollars spent by hospitals on inpatient systems to outpatient systems as a result of the relaxation of the Stark law. We believe that some of this spending has already begun to occur and that the mix shift should accelerate through 2008.

·  We Expect Increasing Levels for Inpatient IT - We believe that we are coming to the end of a major hospital IT cycle, as most hospitals throughout the country have invested heavily over the last 5-6 years in clinical technology systems. However, we believe that inpatient spending on IT should continue to be robust as hospitals that have previously invested in IT raise their ongoing operating expense level dedicated to IT. We recently observed this trend at Cerner's leadership forum and expect this effect to impact other incumbent vendors as well. 

·  Maintain Ratings & Estimates - We maintain our ratings and estimates on the inpatient IT systems vendors. We maintain our Outperform rating on CERN, which we view as one of the best-in-class healthcare IT vendors. We maintain our Market Perform ratings on CPSI, ECLP (Eclipse) and MCK (McKesson) shares. We continue to fear that larger vendors will move down-market, negatively impacting CPSI's competitive position. We believe the recent run in ECLP shares already reflects the improved operations of the business. And we believe that the value of MCK's IT business will be difficult for investors to fully realize while the company's valuation is largely tied to the drug distribution segment.

Posted by Shawn Whalen on October 15, 2007 at 5:29 PM
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We Interupt This Blog

A quick commercial today that Schwartz Communications is seeking Supervisors and Directors (8-10 years experience) for our San Francisco office. Contact me if you're interested or know good folks for the position.

Posted by Shawn Whalen on October 8, 2007 at 3:26 PM
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EMR Contrarian

To continue the contrarian voice on such things as EMR, here is an interesting article by Evan Steele, CEO of client SRS Software. It originally appeared in HealthcareITNews.

Contrary to media and government rhetoric, today's medical practices can survive without implementing an electronic health record. The EHR is simply a basic undoing of the way physicians customarily practice medicine.

It's an extremely costly approach and has even been shown to reduce productivity in the first year after implementation.

Hospital- and office-based physician groups that implement an enterprise document management solution not only survive - but also thrive - without an EHR.

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Posted by Shawn Whalen on October 6, 2007 at 10:23 AM
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Dead Canaries & RHIO Tech Survey

RHIOs has been a topic of interest on this blog, with a dozen or so posts. The research firm Healthcare Industry Insights released a survey on RHIO technology solutions. Results highlighted in a press release:

From an extensive survey of 20 software products that service regional health information organizations (RHIOs) and health information exchanges (HIEs), including assessments of their features and capabilities, indicate no "one size fits all" solution yet exists for this rapidly evolving market. Key findings from the Health Industry Insights survey include the following:

• RHIOs vary widely in their business models and technical architectures; vendor products have been built around re-usable frameworks that can serve as the foundation for multiple, custom deployments.

• Vendors with products that were originally introduced to support Enterprise Master Patient Index (EMPI), clinical messaging, HL7 messaging, and clinical portal functions had more experience connecting to external clinical applications.

• Although HL7 standards have been in place for many years, direct vendor experience with the specific external source clinical applications is an important consideration when selecting a vendor's HIE solution.

• Most vendors are betting that surviving RHIOs will migrate to more robust architectures and will have the financial resources to do so.

To read more on the survey and HII's opinions on RHIOS, hit the "Continue Reading" link.

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Posted by Shawn Whalen on October 1, 2007 at 11:21 AM
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