Health IT tak­ing over the world

Many mar­kets out­side U.S. post­ing strong growth

Modern Healthcare - - FRONT PAGE - Joseph Conn

The health­care in­for­ma­tion tech­nol­ogy mar­ket in the U. S. is boom­ing, but it’s much the same story else­where. Ac­cord­ing to a De­cem­ber re­port from IDC Health In­sights, Fram­ing­ham, Mass., to­tal global health­care IT spend­ing is pro­jected to top $97 bil­lion in 2015, up 27% from 2011. The es­ti­mates in­clude spend­ing on hard­ware, soft­ware and ser­vices for providers and pay­ers. In com­par­i­son, U.S. pur­chases will sur­pass $54 bil­lion in 2015, up 29%.

The health IT buy­ing binge in the U.S. should come as no sur­prise. In 2009, Congress passed the Amer­i­can Re­cov­ery and Rein­vest­ment Act with about $29 bil­lion for health IT in­cen­tive pro­grams. Ac­cord­ing to the CMS, to­tal fed­eral in­cen­tive pay­ments jumped 48% be­tween Oc­to­ber and Novem­ber last year to $1.8 bil­lion.

“Health­care is go­ing through this global in­vest­ment cy­cle,” says Scott Lund­strom, IDC Health In­sights group vice pres­i­dent. In the U.S., the stim­u­lus law is hav­ing an im­pact, but he says hos­pi­tals are mak­ing up­front IT in­vest­ments to meet mean­ing­ful-use tar­gets, with the cost be­ing only par­tially off­set by fed­eral in­cen­tive pay­ments and the rest made up through gains in oper­a­tional ef­fi­cien­cies.

Over­seas, up­ward health IT spend­ing trends are track­ing those in the U.S., but for varied rea­sons. In Europe, with a plethora of pub­lic pay­ment sys­tems, “they’re re­ally fo­cused around pop­u­la­tion man­age­ment,” in­clud­ing tools to im­prove ev­i­dence-based medicine, Lund­strom says. In the Mid­dle East, there is “very strong in­vest­ment” that is “maybe a lit­tle bit more un­der­stand­able and self-serv­ing by the monar­chies to mit­i­gate some of the Arab-spring ef­fect.”

The Asia Pa­cific mar­ket is a mix of “five or six re­ally vi­brant economies” and “a lot of other places” that are try­ing to reach a base level of ser­vices. China, for ex­am­ple, is both, with tech­no­log­i­cally ad­vanced ur­ban cen­ters and ru­ral ar­eas where the ba­sics of build­ing clin­ics and get­ting medicine to the peo­ple are the top pri­or­i­ties.

An­other ex­pert on the global health IT land­scape is Jeremy Bon­fini, ex­ec­u­tive vice pres­i­dent of global ser­vices at the Health­care In­for­ma­tion and Man­age­ment Sys­tems So­ci­ety, a Chicagob­ased health IT trade group. This year, HIMSS plans to host con­fer­ences in Abu Dhabi, Copen­hagen and Sin­ga­pore.

In the global mar­ket­place, U.S. ven­dors of IT in­fra­struc­ture prod­ucts such as Or­a­cle and Cisco are “al­ready there,” Bon­fini says. Also, “a lot of the back-end rev­enue-cy­cle man­age­ment com­pa­nies—siemens, 3M—are com­mon ven­dors across the world,” he says. “The EHR ven­dors are a lit­tle bit more chal­lenged. I think one of the hottest mar­kets to watch is the Mid­dle East. Saudi Ara­bia wants to build 300 new hos­pi­tals in the next five years.”

For U.S. ven­dors look­ing abroad, Bon­fini says a big chal­lenge will be find­ing qual­i­fied staff. The U.S. mar­ket is so busy, while “the in­ter­na­tional mar­kets are clam­or­ing for at­ten­tion as well. They are very hot mar­kets. They’re small com­pared to the U.S., but they have rel­a­tively high growth be­cause their pop­u­la­tions are grow­ing.”

As­sess­ing the mar­ket

KLAS Enterprises, based in Orem, Utah, pro­duces cus­tomer-sat­is­fac­tion sur­veys and rank­ings based on in­ter­views with health IT sys­tem cus­tomers. Pre­vi­ously, KLAS con­fined ef­forts to the U.S. and Canada, where U.S. prod­ucts sell well. That parochial­ism is about to change.

About three or four years ago, in­for­ma­tion re­quests from over­seas be­gan pick­ing up, says Jared Peter­son, ex­ec­u­tive vice pres­i­dent of re­search op­er­a­tions at KLAS, “be­cause they were us­ing ven­dors from the United States.” Mean­while, “a cou­ple of the ven­dors that started dip­ping their toes into Europe found there wasn’t a Klas-type or­ga­ni­za­tion over there” and en­cour­aged KLAS to look into that mar­ket.

In Septem­ber, the Bri­tish govern­ment pulled the plug on the National Health Ser­vice’s national IT pro­gram af­ter nine years and spend­ing nearly $10 bil­lion. The Brits’ de­ci­sion threw their hos­pi­tal health IT mar­ket up for grabs.

Peter­son says he flew to Birm­ing­ham, Eng­land, for a trade show in Novem­ber, and “man, the en­ergy was there,” he says. This month, KLAS plans to pub­lish its first re­port on the in­ter­na­tional EHR mar­ket, cov­er­ing about 14 multinational ven­dors. It will in­clude Aus­tralia, Canada and West Europe and will “lightly touch” on Cen­tral and South Amer­ica, the Far East and the Mid­dle East, fo­cus­ing on mar­ket share. KLAS also plans to re­lease in April a U.K. cus­tomer-sat­is­fac­tion re­port on EHRS and fi­nan­cial sys­tems.

Still, KLAS won’t try to tap the en­tire global health IT re­search mar­ket.

“The Chi­nese mar­ket, that’s a big mys­tery,” he says. “The In­dia mar­ket, we’re just scratch­ing the sur­face and won­der­ing what’s go­ing on.”

In the U.S., Epic Sys­tems Corp., an EHR ven­dor from Verona, Wis., is do­ing well in the large-hos­pi­tal niche. Still, Epic also has looked abroad. It has of­fices and cus­tomers in Dubai and the Nether­lands.

In 2010, Epic won a $14 mil­lion, five-year con­tract to pro­vide the U.S. Coast Guard with an EHR sys­tem for its 40-plus am­bu­la­tory clin­ics as well as its ship­board sick bays. Last month, the State Depart­ment an­nounced it had en­tered into an agree­ment with the Coast Guard to share health IT costs and soft­ware, in­clud­ing

use of the Epic EHR around the globe.

“They’re go­ing to put us in 170 coun­tries,” says Epic founder and CEO Ju­dith Faulkner. It’s an achieve­ment she proudly de­scribes as “cool.”

In Faulkner’s view, U.S. com­pa­nies have ben­e­fit­ted from grow­ing up in a tough neigh­bor­hood—the largest health IT mar­ket in the world. “I think the U.S., be­ing as big as it is, has been very de­mand­ing and has cre­ated very strong sys­tems.” In many smaller coun­tries, “there hasn’t been the build-up of sys­tems that are com­pet­i­tive,” she says.

Faulkner says Epic ap­proached the bar­ri­ers of pro­gram­ming in mul­ti­ple lan­guages by first “in­ter­na­tion­al­iz­ing” the code base of its sys­tem “so our soft­ware doesn’t rec­og­nize any sin­gle lan­guage; it’s lan­guage independent.”

Next came the process of “na­tion­al­iz­ing” the EHR to a spe­cific coun­try and cus­tomer by cross-map­ping the in­ter­na­tion­al­ized code back to a hu­man lan­guage.

So far, she says, “We’ve only done it once, for Dutch. It’s a lot of map­ping. It’s a task, but it hasn’t been that bad of task.” Build­ing on the foun­da­tional work of in­ter­na­tion­al­iz­ing the code first was “a huge leg up,” she says.

That said, the global health IT hori­zon, for now, has its lim­its, in Faulkner’s eyes.

“Some coun­tries are re­ally not ready for health­care IT,” she says. “First they have to get bet­ter water, they have to bring in enough doc­tors and have to get bet­ter san­i­ta­tion and pub­lic health.” There are also is­sues of costs, in­tel­lec­tual prop­erty rights, cul­ture and em­ployee safety.

“I’ve been told the U.S. is re­spon­si­ble for about 60% of health­care IT pur­chases,” she says. “When you rule out those coun­tries that I’ve just men­tioned, what’s left, it’s not gi­gan­tic.”

While many of the U.s.-based com­pa­nies and as­so­ci­a­tions are look­ing abroad to ex­pand their op­er­a­tions, a few for­eign eyes also have been fixed on North Amer­ica. In 2000, a unit of Ger­man in­dus­trial con­glom­er­ate Siemens bought U.s.-based health IT out­sourcer Shared Med­i­cal Sys­tems for $2.1 bil­lion.

But the re­cent, in­cen­tive-fu­eled IT boom has not pro­duced a gold rush of for­eign-based firms head­ing here, says C. Sue Re­ber, com­mu­ni­ca­tions di­rec­tor for the not-for-profit Cer­ti­fi­ca­tion Com­mis­sion for Health In­for­ma­tion Tech­nol­ogy. CCHIT has tested and cer­ti­fied nearly half of the 1,556 EHR sys­tems or com­po­nent parts of sys­tems from 705 de­vel­op­ers on a ven­dor list kept by the ONC.

“I can tell you, an aw­ful lot of them are off­shore de­vel­op­ment, but the dis­tri­bu­tion and mar­ket­ing and head­quar­ters are here,” Re­ber says. The num­ber of for­eign-based firms seek­ing prod­uct cer­ti­fi­ca­tion has been “mi­nus­cule.”

One of those for­eign com­pa­nies on the ONC list is Orion Health. Soft­ware from the New Zealand-based firm pow­ers health in­for­ma­tion ex­changes in Louisiana, Maine and Al­berta, Canada.

The U.S. of­fers a level play­ing field to out­siders, but that doesn’t make crack­ing the health IT mar­ket here easy, says Paul Viskovich, a na­tive New Zealan­der, now a U.S. cit­i­zen, and pres­i­dent of Orion’s North Amer­i­can divi­sion. Ten years ago, Viskovich launched his com­pany’s U.S. cam­paign from his apart­ment in Santa Mon­ica, Calif., and fo­cused, out of ne­ces­sity, he says, on ru­ral providers, the only ones who would lis­ten to their sales pitches.

The com­pany’s first U.S. sale, of a browser­based clin­i­cian por­tal, came in 2001 at 159-bed Cen­tral Washington Hos­pi­tal in Wenatchee.

“I think, gen­er­ally, the U.S. mar­ket is open,” Viskovich says. “The is­sue for some­one com­ing in is its size. It’s the world’s big­gest mar­ket, so it is an at­trac­tive one.” To­day, Viskovich says, Orion’s an­nual rev­enue is more than $100 mil­lion and two-thirds comes from North Amer­ica, “so we’ve been well re­ceived.”

The global IT realm isn’t al­ways about com­pe­ti­tion, how­ever. Col­lab­o­ra­tion and com­mu­ni­ca­tion oc­curs there too.

Wes Rishel is a vice pres­i­dent and health­care an­a­lyst for Gart­ner, a tech­nol­ogy mar­ke­tre­search firm, and a fre­quent blog­ger on health IT uses. Rishel re­cently praised the ef­forts of an in­ter­na­tional group of health in­for­mat­ics ex­perts work­ing on an in­ter­op­er­abil­ity project called the Clin­i­cal In­for­ma­tion Mod­el­ing Ini­tia­tive led by fel­low HIT Stan­dards Com­mit­tee mem­ber Dr. Stan­ley Huff, chief med­i­cal in­for­mat­ics of­fi­cer at In­ter­moun­tain Health­care in Salt Lake City. The group also in­cludes rep­re­sen­ta­tives from the U.K., Korea and Canada. “It’s just nat­u­ral” they work across bor­ders, Rishel says. “The aca­demic com­mu­nity that does the the­ory of in­for­mat­ics is very in­ter­na­tional.”

On the Web

These days, with high-pow­ered Web tech­nol­ogy, U.S. en­trepreneurs don’t have to leave home to launch an IT busi­ness with cus­tomers over­seas.

Dr. Bran­don Winch­ester, an anes­the­si­ol­o­gist, en­tre­pre­neur and a video-tech maven, re­mem­bers July 3, 2009, for the heat and the the­ater of the ab­surd.

Winch­ester had set up a video cam­era and green screen in the garage of his Durham, N.C., home and he was about to shoot his first live we­b­cast, a train­ing pro­gram on ul­tra­soundguided, catheter-placed, anes­thetic nerve­block­ing, a pro­ce­dure “still very much in the early adopter phase of gen­eral anes­the­sia.” His au­di­ence was a peer group in Bei­jing. The heat in Durham that day was in­tense. The 500-watt lights in the garage made it broil­ing.

Winch­ester stripped off his pants, set the cam­era to cap­ture him only from the waist up and sol­diered on, com­plet­ing the lec­ture.

“I was in a suit, tie and boxer shots and I was still sweat­ing bul­lets,” Winch­ester re­calls. A bread­box-sized por­ta­ble video editor called a Newtek Tri­c­as­ter han­dled the slides, sound and back­ground im­ages while Winch­ester’s video vis­age streamed to the Web. Af­ter nearly fall­ing vic­tim to the China syn­drome in that first swel­ter­ing shoot, Winch­ester added air con­di­tion­ing to his garage.

Since the Bei­jing we­b­cast, Winch­ester has moved to Gulf Breeze, Fla. There he’s the re­gional anes­the­sia fel­low­ship di­rec­tor at the An­drews Re­search & Ed­u­ca­tion In­sti­tute. He’s also upped his game to pro­duc­ing live, high­def­i­ni­tion videos of him­self—with the help of an as­sis­tant on the por­ta­ble video equip­ment— per­form­ing the block­ing pro­ce­dures on ac­tual pa­tients. To shoot video in the con­fines of a preop room, Winch­ester fit­ted an en­doscopy cart with a video broad­cast­ing box, edit­ing tools, mon­i­tor and mul­ti­ple cam­eras, in­clud­ing one on a swing arm. The cart en­ables Winch­ester to cap­ture mul­ti­ple clin­i­cal pro­ce­dures as he wheels it from room to room.

Winch­ester we­b­casts train­ing videos now “about once ev­ery four to six weeks” and re­ceives $500 a lec­ture from a cor­po­rate spon­sor that of­fers the ses­sions with­out charge to in­vited physi­cians. Pay­ments for live pro­ce­dures run to $5,000, Winch­ester says. He plans to de­velop a 12-hour train­ing se­ries next, he says.

“I think this is truly the be­gin­ning for an enor­mous op­por­tu­nity to sig­nif­i­cantly im­prove med­i­cal com­mu­ni­ca­tion world­wide via the In­ter­net, not to men­tion an enor­mous busi­ness op­por­tu­nity for com­pa­nies that spe­cial­ize in the cap­ture, live stream­ing and on-de­mand con­tent de­liv­ery,” he says.

Dr. Bran­don Winch­ester and his we­b­cast­ing/video-lec­tur­ing equip­ment.

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