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Paul Black is CEO of Allscripts and he’ll be with me at Health 2.0 on October 1-4. Paul has been CEO of Allscripts for about five years, taking over from Glen Tullman who grew the company aggressively by acquisition over the previous decade. Paul has been steering Allscripts through a pretty big transformation for the past few years, and they’ve been the major EMR vendor that has most aggressively reached out to the startup tech community. This is an edited transcript of an interview we had in late August. — Matthew Holt
Matthew Holt: Paul thanks for talking with me today, but also we’re going to have you on for a quick chat when you’ll be on the main stage at Health 2.0, of which Allscripts has been a great supporter. Your colleagues Tina Joros and Erik Kins have been there for many years but not you, so I ‘m thrilled to have you coming in early October. Paul, welcome!
Paul Black: Thank you very much. It’s a pleasure to be on the call with you today.
Matthew: Let’s dive in to the current state of play. There’s been some changes over the last five to seven years since the HITECH dollars came in, as more and more physicians, and more and more hospitals put in electronic medical records.
Obviously, Allscripts, was, I think, it’s right to say, built by Glen and Lee Shapiro via lot of acquisitions, especially with the Eclipsys purchase, with the goal of becoming a big player in that meaningful use world. And obviously, you have your old company, Cerner, and your friends from Wisconsin, Epic, who have been very dominant becoming a single platform for many large integrated delivery systems. Can you give me your sense of where the mainstream enterprise EMR market is at the moment?
Paul: I think that the mainstream EMR market in United States is becoming a mature market. And by that I mean it’s a marketplace in which almost every institution, almost every hospital, almost every post-acute facility, almost every ambulatory facility, has some semblance of an electronic medical record system. And certainly, they have an electronic billing set of capabilities. So, from that standpoint, almost everybody has something with regard to the ordering the management of and the documentation surrounding a clinical series of events.
Matthew: Give me a sense of how you think that’s changing in terms of the split between the integrated systems which are covering in-patients and out-patients, with physicians using the same system on both sides of the fences were, and the continued, I would say growth, but probably more accurately the continued existence of a large ambulatory-only segment of the market? After all that’s different for not only the way that the health systems and medical groups organize, but also the way that they’re served by organizations like you and Epic and many others. Is that system integration continuing or do you think that trend is kind of stopping?
Paul: I’ll take it from a couple of different angles. One is from an integration at the industry level, what has been vertical integration of large integrated delivery networks, or large multispecialty groups, especially practices, or in some cases, payers who are acquiring assets. I tend to see that while there was a lot going on over the course of the last four, five years, I’m starting to see people be more focused on what they’ve already acquired, and looking at operational efficiency and looking internally to ensure that they’re gleaning the expected returns, both clinically and financially, of the original goals of how they built those enterprises. That means from a culture standpoint, from an operation standpoint, and from a financial standpoint.
So, I don’t sense that there is as much of a, if you will, a go-go attitude to the continuation of acquisitions. I don’t think it’s necessarily been a conscious pause, but in some cases there’s been a lot of affiliations and acquisitions that have caused people to really have to make sure that they’ve done the things they need to do to really operationalize and to optimize the assets and the people that they are now a part of a new overall enterprise. I think from an industry standpoint of the people that serve that marketplace, us and some of the companies that you mentioned today, I see it’s just a natural progression of the other point that you’ve started with about where do we find ourselves in the state of the industry.
Again, this is more of a U.S. statement, but fundamentally, there are three organizations now that are $2 billion and above, Cerner, Allscripts and Epic, and that you have one that’s a pretty good size and growing which is Athenahealth. And then below the line, if you draw a line there, you’ll find seven or eight organizations that are anywhere from the $80 million to $400 million revenue organizations that serve the marketplace, Quality Systems, eClinicalWorks, CPSI, Practice Fusion, MEDHOST, Meditech, GE to be specific.
There’s a scale component that comes into R&D efforts for the ability for us to continue to all be relevant to this marketplace. The lack of scale, I think, over time, will be an impediment to folks being able to be a full service provider to these large organizations, whether it’s a large integrated delivery network or it’s a large ministry of health in a certain country, or it’s a large multispecialty group practice.
Specifically, are you able to continue to innovate on top of the EMR that you have? Are you really investing in a population health strategy? Do you have a robust and true answer for post-acute all things outside of the four walls of the hospital, all things outside the four walls of clinics? Do you have a precision medicine platform that is EMR-agnostic? And finally, do you really have an answer for these organizations who all are looking for a consumer answer to how they compete and how they service the people from time to time in their catchment area as patients?
Matthew: Right. Actually, you really helpfully laid out the next set of topics for us today today. Tell me a bit about your strategy and what your belief is as to how the customers you are serving, will they be from other physician groups or integrated systems? And the ones who are working with the other players you’ve mentioned, how are they doing in two areas? One is, moving data around between competitive systems – the whole interoperability piece. The second is opening up to allow other technology companies to use their platform the same way that we are seeing, in more general technology, such as the App Store and the Google Play Store. So, give me a sense of about those two.
Paul: On the moving around data part of the question, I see that as a result of all these platforms that have been invested in over the last 10 plus years, and certainly the acceleration of the deployment of these solutions over the last three plus years as a result of the stimulus program — Meaningful Use, one, two, and now three.
There are a lot of different EMRs that are out there today that have data inside of them that are important for organizations to be aware of and have access to, as you are truly becoming accountable clinically and financially for that patient population. The ability to get that data to truly harmonize it, meaning I’m going to store “Paul Black” in a record only once, even though I may be represented in multiple different electronic medical records because I have been a patient there and I have a medical record number established with that organization.
But to do more than the EMPI (master patient index) component which is a decades old technology, but to truly get that information in there but also harmonize it, has to do with me being represented as having an allergic reaction to Penicillin in that record only once, not seven times because it’s in seven different electronic medical records. And being able to understand that a prescription that’s written in a system that might be using First Databank is actually the same prescription that’s written in a system that uses Multum as its vernacular for how those solutions and medications are counted out and actually prescribed.
That kind of data harmonization is available today, certainly from Allscripts. There’s other people that are working on that, but that is part of the complexity that is in fact, a reality of connecting multiple disparate electronic medical records. But as I remind everybody, it’s 2017, computers have been solving algorithmic issues, and large linear programming issues for decades, back to the 1950’s, and that’s why computers were invented. And the solutions that we have will solve for that. That thing gets you to a great state of having a bunch of information in a central repository that we call the community record and the community record is manifest in areas where you have multiple different electronic medical records in a community that are served up — and through a harmonization process — put into one location.
That gives you the capabilities to perform your analytics and the analytics is where a lot of people start when they talk about population health. From our perspective, analytics is a byproduct of having all the data in one spot and then once it’s cleansed, once it’s really harmonized and deduplicated, that’s when you really can have an effective statistical work done around that dataset. That then, once you have the “aha!” moment – the IBM Watson commercial moment – you actually have a workflow system that takes that actionable insight back down into the workflow of the caregiver at the bedside, at the clinic, at the emergency room, at a behavioral health clinic, wherever that might be, to really to make that insight actionable. So that’s a big piece of our view of how you move the data. Connect, harmonize, analyze and transact.
To me, the transaction has to be done in the context of the workflow and that would begin my other concept around this which is if I send too much information back down to a physician and they receive data overload, I call that “shouting”, where they received way too much information. If I’m a cardiologist. I may not see new events that I’ve told the computer that I want to see, as a cardiologists, since the last time I saw this patient. I’m not terribly interested in lifelong history of those persons. I know them. They’re sitting in front of me. Tell me what’s new, tell me what’s changed and give me the community information about this patient. They find value in that.
So that concept around “shouting” versus what I call “whisper” are valuable insights that are provided to them that they get high clinical or financial value because they have that data available to them in a synchronized way, in workflow-centric way, where I didn’t have to log in/log out of one the myriad of different electronic medical records. So that usability concept, that workflow concept, that UI, is really important to making these systems work in the real world of having multiple electronic medical records.
I’ll now flip to the second part of your question around opening up the platform. It’s interesting that we started doing this in 2007. As you well know, 2007 is a pretty important year. That’s when the iPhone was invented, but it’s also the year that Allscripts came out with the concept of having an open system.
So, it’s not just a concept inside the company, it’s a philosophy, it’s part of the culture. We have 40 plus people that sit inside of our company and we help third-party application programmer and program writers access a relatively deep layer of API, allow them to build applications on top of and build their own, if you will, ecosystem on top of Allscripts’ platforms. We now have over 4,000 certified application program interface engineering folks that supplement, if you will, our engineering team, but importantly, are building solutions that are industry-specific, that are workflow-specific, that are disease-specific, that will allow someone to benefit from this vast investment our clients have made. They add value to that through other clever interfaces, mobile devices, capabilities around scales or whatever it might be from a consumer standpoint that people are looking for. We are creating that ecosystem for entrepreneurs wanting access to this big network, access to a data layer and access to a company that wants to work with them.
So, the opening up of the platform has been something we’ve been advocating and doing for 10 plus years. We are excited about the Meaningful Use, one, two, and now three requirements around open access and data sharing. As both from a philosophy and culture as well as from an actual technical set of capabilities, we welcome that for the rest of the industry. We think that’s very important. No one community, no one system, no one physician office is only going to have one set of data input in one supplier of all of those technologies. That just doesn’t exist in any other industry and certainly doesn’t exist in this industry, nor will it ever.
Matthew: Thanks for that long and cogent answer because it was a set of complex questions! So, let’s end with what comes out of this. I think you guys are ahead of the curve here as an enterprise vendor– you’re moving with this open API and your work with Microsoft Azure you’re creating that that app store approach. You’re starting to see the other players in the industry come that way. Now there’s a bunch of back and forth about the FHIR standards and about how open the various app stores from the other players actually are, etcetera, etcetera. But we’re heading in that direction where a lot of the value and of the activity in the workflow and the analytics will be in these plug-in apps, that are using Allscripts, Cerner or Epic as kind of a base layer.
What do you think the future is for companies like Allscripts and for that matter Cerner, Epic and the other players we’ve mentioned in terms of working with this multitude of other vendors? Is it going to be a situation where a typical customer won’t really care who the underneath layer is and will be interacting much more with applications from multiple different vendors and just assuming that the data will able to talk to each other? Or, do you think it’s more likely that over time, in order to maintain some market share, players like Allscripts, Cerner and Epic will actually start taking on-board more and more of those functions that you mentioned, like population health management or personal medicine initiatives? Do you think it’ll be a more diverse, open ecosystem in the future or do you think those new solutions will be brought within the bigger companies in order to maintain market share?
Paul: I think it’d be a combination of both. There are 492 electronic medical record companies in United States that were certified by the ONC to be certified electronic medical record provider for meaningful use one and two. I think that, again, now that the platform is pretty much digital across the entire United States, there’s lot of a people that are looking at this and saying, “The platform itself, the transaction machines, if you will, the EMRs, are in place. How can I build an ecosystem that sits on top of or alongside of that in order for me to create value for myself, my company, my family and then my constituents?” So, I think you‘ll see a lot of that that goes on. I think that we’re seeing it today and as I’ve said earlier, we encourage that. We have over a 167 different companies that use our solutions that we represent those 4,000+ engineers, and then we have our own clients that write their own applications as well. And some of those clients actually resell them, so it’s a pretty neat set of capabilities that we enable, and we work very diligently on.
I think that to the core of the question though, is this just disruptive to the major electronic medical records suppliers? I think it is if you don’t embrace it, meaning that someone will eventually say, “I can’t wait for your engineers to build everything that I want to build on my health care system and I have to be a little bit more nimble. I have to be a bit more entrepreneurial. I have to also innovate in my geography”. And if I’m sitting on a platform that doesn’t encourage or allow for that, I think that could be a way for you as an electronic medical records supplier circa 2015, 2014, 2013 and 2012, to get disrupted.
I think most of the people in this business understand that and are, in some way, shape or form, embracing it, and I think that those who don’t will find themselves in trouble. I think the other component of this is that there is a substantial amount of this called “brick work,” or the laying of the pipe, if you will, the connection to all of the different departments, the codes, the bills, you know, the orderable procedures, this doc like to order it that way.
There’s a lot of really important hard work that’s been accomplished over the last 30 plus years. So, for somebody to come in with some new-age technology and think that they can replace what I call these transaction systems, I think that will be a longer timeframe where that gets disrupted. I’ve seen lots of people come in and under-appreciate the complexity of say a pharmacy order. There are 72 different data elements that have to interact in order for that order to be done successfully between the pharmacist, the nurse, the lab, the physician, the phlebotomist,– all the drug allergies, all the checking that goes on than the actual delivery of that medication to the floor of the clinic.
It’s not a seven or eight data field transaction. This isn’t finance. This isn’t debit and credit cards. This is very complex stuff and the outcome has a very important impact clinically, i.e., if you order the wrong thing, you can create an adverse error. So, to me, it’ll be a long time before those transaction systems get fully disrupted, but for those of us that are in this industry who think that that will never happen, I think that would be a warning that people should heed. Someone will figure out a way to do it in a more clever way and it may create a new platform that would be disruptive to those of us who have been doing this for a long time, and those of us that have been doing this for a long time, need to disrupt it before somebody else does.
Matthew: There are couple of different options who might be those disruptors. We talked about going outside the four walls of the hospital and obviously we’re moving to an environment in, which chronic care management is going to be the future, more or less. There are some hiccups, I think, in the way HHS is now thinking about paying some of the stuff. But anyway, assuming we are heading towards that world of more preventive chronic care management, do you think that a big outside tech company – I was talking about Apple and Amazon and some extent, Google – might start putting those pieces together from the outside such as the consumer’s home? Or is it more likely that a well-funded startup focusing on one disease like a Flatiron or Integra Connect in the world of cancer might come in and start chipping away with technology and service solutions and data solutions at the core of provider activity? Where do you think the most likely entrance for this disruption will be? And, give me a sense of when you think things will look very different?
Paul: I’ve been doing this for a while and there have been big cap entrants into this marketplace from time to time and big cap entrants have come in and come out. There’s a pretty long history of that happening where they look at it and say, “This is a really large industry, we should come in and we should try to figure out how we could be a major player in it.” I do think there will continue to be large players that come into it and I think the difference in 2017 and beyond is that the new entrants, whether it’s Salesforce, IBM Watson, Google, Microsoft or Amazon, will come in with a different approach. And that is, with a mobile-centric solution that has to connect to all these backend systems, but come into it with either disease specific, some sort of consumer-driven approach to how to make the experience of the patient or the mother or the caregiver for an elderly parent or something like that, a much easier thing to manage than what it is today, and we applaud that. We think that’s great. We’re actually working on a lot of that ourselves.
I think that would be the entrance and then over time, they would not realize it’s not sufficient just to do some chronic care management and they’ll figure out how to work upstream if you will. At the other end of the spectrum with some of the companies that you’ve mentioned where you start out, I’ve also seen that happen. And quite frankly, there’s a lot other companies that are in a marketplace today that have gotten to be to the $200 million, $300 million, $400 million size, but there’s a reality to being relevant to the entire industry that requires so much R&D investment to fill out all of the different specific workflows and content in order for you to ready on day one, roll a pickup up to the front door of the hospital or the back door of the clinic and say, “Here is your new system and it’s ready to go.” Or, “Turn on this URL and it’s ready to go and everything that you need is ready, it’s already pre-built.”
That requires a lot of investment, that requires a lot of time and the landscape, quite frankly, is littered with a bunch of people who have come in who have had brilliant solutions for one specific medical condition, or one specific medical discipline. As they’ve moved from that one to multiple different specialty types, they haven’t really got to the scale that you really need to have in order to be relevant to not only do that, but also do these other components around the rest of the population health to the rest of the post-acute conversation to precision medicine piece and consumer.
Matthew: Yeah, I believe as one political leader said recently, health care is actually quite complicated.
I think it’s certainly true that we’ve had big players come in. I’m always hearing that Amazon is doing this or Apple is doing that or Google is doing something else. As you said, there’s a bunch of places they could start and they eventually will move back upstream.
I think the evolution of both the delivery side as organizations, both new and old, will continue as they figure out how to reach all these consumers, which haven’t really cared about other than when they’ve been within their four walls for the past decades or actually thousands of years. There is a way that the new technology-based care delivery organizations will make a huge difference. But that’s not for the next few years, and I think any of us who’ve got a few gray hairs know that this isn’t Snapchat. We’re not changing how a bunch of clinical people operate in three years. Your words of wisdom are well-heeded, and people have to knuckle-down – there’s a lot to be done. Anyway, that’s my commentary.
I’ve been talking to Paul Black. He is the CEO of Allscripts. He’ll be at Health 2.0 next month on a panel that’s normally called, “What’s Next With Interoperability.” We’ll be talking about all these kinds of issues. Joining Paul will be Don Rucker from ONC, Tate Gilchrist from Cerner, Arien Malec from Change Healthcare, Ryan Howells from the CARIN Alliance group and Loni Rae Kurlander from Medal. We will dive into some of the topics we touched on today and a few more . Paul, thank you very much for your time today. I’m looking forward to seeing you in a few weeks.
Paul: Thank you very much, Matthew, and I look forward to seeing you and your fine constituents there as well.
Paul Black is CEO of Allscripts. Matthew Holt is founder/publisher of THCB and the co-founder of Health 2.0.
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