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91. ge healthcare part 4

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  • 1. H.I.S.-toryby Vince CiottiEpisode #91: GEHealthcarePart 4© 2013 by H.I.S. Professionals, LLC, all rights reserved.
  • 2. The Oldest HIS Vendor?• Thanks to Jim Pesce, VP over McKesson’s HIS products, we pick upthe story of how GE began its HIS ventures several years beforethe three oldest current HIS vendors were founded back in 1969:– Compucare, Shared Medical Systems, and Meditech.• You may remember Dr. Octo Barnett’s early project at MIT thatwas the HIS baptism for Meditech’s founder Neal Pappalardo.Turns out, Jim Pesce joined GE Healthcare way back then too:– “Actually started up in 1966. Was a start up funded byCambridge, MA based engineering firm Bolt Baranek andNewman. They were building the internet for healthcare. Thetechnology couldnt support their vision. GE took over fundingat end of 1967. GE then sold the system to HCA in 1971 whenthe entire team, except Pesce relocated to Nashville. Thesystem which was financials only is the home grown billingsystem HCA still uses today... Imagine that!”
  • 3. The Sleeping Giant…• In fact, HCA is not alone in using 1960s technology in 2013:– Hundreds of hospitals still run Siemens “Invision,” with TCE(Transmission & Control Error) reportsfrom 1960’s SHAS.– And hundreds more are still running Meditech’s “Magic,” withroots that go back thru MIIS to Dr. Octo Barnett’s MUMPS…• What’s germane to our HIS-tory isGE got out of HIS in 1971, andstayed out for several decades,ending any claim to being one ofthe oldest continuous HIS vendors.• Then, in the late 90s, the sleepingelectronics giant re-entered the HISindustry with a vengeance, using itsenormous capital assets to fund aseries of acquisitions of HIS firms.
  • 4. Roaring Back, 20 Years Later• As the time line below illustrates, once GE woke up in 1997, itwent on a buying binge, gobbling up a slew of niche players:Company Acquired Date(New Name)– Lockheed Martin/LORAL 1997 (Centricity PACS)– Marquette Medical Systems 1998 (Centricity Perinatal)– Per-Se RIS 2001 (Centricity RIS )– iPath ORMIS 2002 (Centricity Perioperative)– BDM 2002 (Centricity Pharmacy)– MedicaLogic Logician 2002 (Centricity Physician Office EMR)– Millbrook 2002 (Centricity Physician Office PM)– TripleG 2003 (Centricity Lab)
  • 5. The Net is CAST• The biggest acquisition of all was was IDX in 2005, for $1.2B, whohad themselves acquired a full suite of hospital & ancillary systems,all renamed as part of the PHAMIS “cast” series of product names.• So GE renamed each with one of its own “Centricity” monikers:IDX Name(GE Name)Flowcast Centricity BusinessGroupcast Centricity Group Mgmt.Carecast Centricity EnterpriseImagecast Centricity RIS-IC• Most importantly, just like other acquisition-oriented firms such asHBOC, Eclipsys, Allscripts, etc., GE set about integrating the mostimportant components of any HIS system: marketing material!Vendor HQ sales mavens churn out “seamlessly” integrated:– Brochures, PowerPoints, Proposals, Contracts, Invoices, etc.• Some vendors even interface their disparate HIS acquisitions…
  • 6. Impressive Financials• Per the chart below, GE Healthcare grew nicely from these HISacquisitions, and adding IDX’s ≈$500M in annual revenue at thetime of the takeover made GE an overnight $1B+ HIS player!– They suddenly ranked 4th behind McKesson, Siemens &Cerner• GE could offer both “Total HIS” (financial, clinical & ancillaries) aswell as a full practice management suite (financial & clinicals).• All under a fully integrated set of demos, proposals, ppt file, etc.Like other acquiring vendors, these products ran on a way array ofhardware platforms, OS, data bases and programming languages…
  • 7. Sales Stars• To head up sales of theirred hot HIS division, GErecruited Frank Pecaitis,sales superstar duringQuadraMed’s halcyondays of the 90s, who alsohelped put MedSphere’s“OpenVista” on the map.• Here’s GE’s demo dudes &dollies at our 2009 “HISBuyers Seminar” in Dallas:• You name it, hospital orpractice system, and theycould present it – on aseamlessly integrated ppt!
  • 8. GE’s Apogee…• By the end of the decade, GEhit an estimated $1B+ in HITrevenue from a large clientbase of ≈100 hospitals andover 1K physician groups.• But then something happenedto GE as well as Horizon,Soarian, Sunrise, Millennium,etc. They ran upon an “epic”competitor that dominatedthe large AMC/IDN world...• Frank left, revenues slacked,and they not only lost largehospital sales, but started tolose many large Centricityclients as well to Ms. Judy.
  • 9. A “Caradigm” Shift• There were high hopes for GE’s 2009 joint venture with IHC,creators of “HELP” years ago. To quote the Salt Lake City Tribune:– “In early 2009, General Electric announced a $3 billioninvestment in new medical technology that involved apartnership between GE Healthcare and Utah’s IntermountainHealthcare to create a top-line electronic medical-recordsystem. The Web-based record system was designed to helpdoctors and nurses avoid medical errors and waste, while alsocreating an online record for patients.”• Then, in March of this year came the surprise announcement:– “Caradigm, a joint venture formed 10 months ago by GEHealthcare and Microsoft, has laid off approximately 70percent of its Utah workforce.The layoff, which took place onWednesday at the company’s office in Murray, affectedbetween 40 and 50 employees.”
  • 10. Beginning of their 2nd Perigee?• In our annual ranking of HIS vendors by annual revenue, weestimate GE has fallen several positions since their post-IDX peak.• They even sold their RX system back to BDM in March! Is it thestart ofsecond retreat from the HIS biz? If I live long enough, I’llrevisit this prediction in a 2023 HIS-talk HIS-tory episode on GE…• Meanwhile, here’s the 47-year picture of GE’s HIS ups & downs:

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