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3. 2018 mid range vendors 4-4
- 1. 2018 HIS VendorReview Part 3: Mid-Range Vendors © 2018 by H.I.S. Professionals, LLC, all rights reserved. By Vince Ciotti & Elise Ames HIS Professionals, LLC athenahealth eClinicalWorks Meditech
- 2. Mid-Range Vendors • Afterlast week’s review of the top 3 vendors by revenue, we now delve into the details of 3 vendors in the middle of the HIS market with from ≈$.5B to ≈$1.5 B in annual revenue each: • These vendors generally target small to mid-size community hospitals from <25-bed CAH up to 300 beds in size, although it’s unlikely they’d ever turn down a large AMC or IDN prospect! • This episode covers their: - Annual revenue: for 2017 and previous years as far back as we have tracked it. - Product lines and client base by bed size - M & As and other recent developments - Candid assessment of future prospects
- 3. Top 10 HISVendors for 2018 • To put the mid 3 in perspective, here’s all the Top 10 based on 2017 revenue figures come from 10-Ks or vendor info. Estimates had to be made for companies that have many divisions (e.g.: Harris Healthcare), or are privately held (e.g.: Medhost).
- 4. • Ranked #4 in terms of 2017 revenue is athenahealth, a leading player in the physician practice market for decades before buying their way into the HIS market with the acquisition of RazorInsights in 2015. Their growth to over $1B is shown below: • Razor had ≈20 CAH clients and ≈$2M in revenue. • athena was founded way back in 1997 and these HI$-torical revenue #s show their impressive $ growth over the past decade: #4:
- 5. athena Products &Packaging • Founder Jonathan Bush deserves credit for the ingenious pricing that has led to their success among MD practices: – Instead of the large up-front capital fees for hardware and software license fees that most vendors charge, – athena charges a % of cash collections; little up-front capital is an attractive proposition to cash-strapped MDs, although challenging for larger hospitals’ cash flow… • Other stats: - 106K provider clients - 5,282 FTEs - 90+ hospital sales. • athena joined Carequality interoperability, competing with Cerner’s CommonWell.
- 6. athena’s HIS Product •athena’s HIS system was first acquired from RazorInsights: – Formed in 2010 by 3 ex-McKesson gurus, Razor’s “One” HIS was a real- time “cloud” HIS targeting CAH hospitals with its self-developed EHR. – After athena acquired Razor in 2015, they then signed 4 CAH hospitals to pilot “athenaOne” integrated with their physician practice system. • Another major coup was signing Toledo Medical Center, a 250- bed AMC, as pilot for a vastly up-scaled “athenaOne” based on BIDMC’s “WebOMR” designed for much large facilities. • Downside: four hospitals that tried to convert in 2016 to One gave up after troubled implementations and went back to CPSI: e.g.: Jackson (AL), Veterans (IA), Kimball (NE), Appleton (MN). • Jonathon Bush claims athena has retained 95% of hospitals it brought live, for a total or 56 mostly small (under 100 beds).
- 7. • Another recententrant into the HIS market is physician practice giant eClinicalWorks, with $490M in annual revenue in 2017. Founded in 1999 in Westborough, Mass., eCW targeted small to mid-size practices of under 50 MDs, on their cloud-based “10e.” • We added them to our list last year after they announced their “10i” HIS, fully integrated with their "10e” MD system. #5:
- 8. • Despite solid$ growth, eCW sure had a rough year in the news: - In May, the Department of Justice filed a False Claims Act suit claiming eCW misrepresented the capabilities of its software in its EHR attestation, as well as allegations they paid kickbacks to customers for promoting products. Truth is probably that their greatest sin was getting caught! Odds are many of the attestations filed by over 1K vendors (≈700 MD and ≈300 HIS) had similar exaggerations about functionality, and many vendors “reimburse” their clients for providing demos or hosting prospect site visits… Ouch! - In November eCW got hit by a $999M (at least it’s not $1B…) putative class-action lawsuit filed in NY by the survivors of a deceased patient claiming they “failed to maintain the integrity of patient records.”
- 9. • Amazing howwell eCW did financially in spite of that bad news. Per 10Ks, their revenue by quarter jumped consistently: – 2nd Qtr = $120M, 3rd Qtr = $130M, and 4th Qtr = $140M • with a 2017 total of $490M per their CFO. The bad news might impact future sales, but again, most HIS vendors are as optimistic answering questions on EHR certifications as they are answering RFP feature checklists: “yes, yes, yes, yes, yes, yes…” eCW Future Prognosis • At their 2017 user conference eCW claimed to have the 2nd largest EHR client base (mainly MDs), with this chart showing where their new clients were coming from. They claim 20 letters of intent for their new 10i HIS system, so we are guardedly optimistic about them…
- 10. • Ranked #6 in terms of 2017 revenue is Medical Information Technology, 49 years since their humble beginnings in 1969. They entered the LIS market in the ‘70s at Cape Cod Hospital, gradually expanding to a full HIS in the ‘80s. Revenue last year was $481M, a nice $ increase after 4 years of $ decrease. Credit goes to Release 6 sales to clients on older HIS products… #6:
- 11. • Meditech actuallyhas 3 distinct HIS products & client bases: – Magic – first developed in the 1970s as Meditech’s version of MUMPS (aka “MIIS”), there were over 700 hospitals using it during it’s heyday, probably down to under 500 today... – “Client/Server” - the quotes are from their contract, as it’s merely a Windows front-end to MAGIC – a vastly-improved GUI, but hardly a true C/S like Allscript’s Paragon. C/S sold very well during the 90s, with ≈500 clients, since dropping. – Release 6.x – originally known as Focus and MAT (Meditech Advanced Technology), this is the latest & greatest product. Three Meditechs • Still a proprietary data base, but far more modern than Magic or C/S, it is more of an “Append” data base than B-trieve like the older technologies, and easily the most feature-rich, with ≈400 sites & growing.
- 12. • If Meditechwere ever to go public, we’d buy the stock: – They could still sell to some mid-sized Siemens clients on Invision and Medseries4, as well as some of the Healthland clients on Classic, Centriq & AHN... Meditech Prospects - Plus they have almost 1,000 clients currently on Magic & C/S to sell Release 6 thru access to C-suites… • Another recent major development that should help sales: – They now offer an integrated physician system within Release 6 with Practice Management (Reg, Sched, & BL) and an EHR. – With several pilots live and scores of sales, this should help them compete with athenahealth, eClinicalWorks, etc. • In addition, they now offer “MAAS” (Meditech As A Service) for small CAH hospitals, via the Cloud with subscription pricing.
- 13. • Here’s anupdate to last week’s table of which vendors product are being marketed or “supported” for which hospital bed size: Products by Bed Size
- 14. Next Week • Ourfinal episode next week covers the remaining four HIS vendors, with less than $300M in 2017 annual revenue: – Their client bases consists mostly of mid-size and small (under 100 bed) community hospitals, including CAH (Critical Access Hospitals), of which there are over 1,200 in the US: 7. CPSI (Evident) – CAH leader before acquiring Healthland 8. Harris Healthcare (QuadraMed) – with many acquisitions 9. Medhost (HMS) – EDIS leader with many chain HIS clients 10. Cantata (NTT Data) – spun off after $3B Dell acquisition • With the HIS industry being so complex, we must have gotten something wrong, so if you’d like, have your attorneys contact: - vciotti@hispros.com eames@hispros.com 505.466.4958 413.329.6925