H.I.S.-tory

by Vince Ciotti

Episode #88: GE Healthcare

Part 1© 2013 by H.I.S. Professionals, LLC, all rights reserved.

6th of Today’s Leading HIS Vendors• This week we continue the HIS-tory of today’s

vendors with GE Healthcare, whose 2012 estimated revenue places them in 6th place:1. $3.2B = McKesson, née HBOC = Walt Huff, Bruce Barrington, & David

Owens 2. $2.6B = Cerner, still run by Neal Patterson, co-founded with Cliff Illig3. $1.8B (est) = Siemens, née SMS: Jim Macaleer, Harvey Wilson & Clyde Hyde4. $1.5B = Epic. Gee, I have to wonder, just who was it who founded them? 5. $1.4B = Allscripts, née Eclipsys, also founded by Harvey Wilson of SMS.6. $850M (est) - GE Healthcare, née IDX/PHAMIS: created by Malcolm Gleser7. $597M = Meditech, still run after all these years by Antonino Papallardo8. $375M = NextGen: née Quality Systems Inc. founded by Sheldon Razin9. $183M = CPSI, founded by M. Kenny Muscat & Denny P. Wilkins (who??)10. $156M = HMS (Healthcare Management Systems), Tom Givens & John Doss 11. $150M = Keane, parent giant by John Keane, but HIS div. built by Ray Paris 12. $106M = QuadraMed, née Compucare, founded by Sheldon Dorenfest13. $75M (est) = Healthland, formerly Dairyland, founded by Steve Klick

Notice The Changes?• Wonder who noticed the changed position of several vendors in the

preceding table with 2012 revenue? Two even have new names!2012 Annual Revenue

2011 Annual Revenue 1. $3.2B = McKesson2. $2.6B = Cerner3. $1.8B (est) = Siemens4. $1.5B = Epic 5. $1.4B = Allscripts6. $850M (est) - GE Healthcare 7. $597M = Meditech8. $375M = NextGen9. $183M = CPSI10. $156M = Health Tech (HMS) 11. $150M = NTT Data (Keane)12. $106M = QuadraMed13. $75M (est) = Healthland

1. $3.2B = McKesson2. $2.2B = Cerner3. $1.7B (est) = Siemens4. $1.4B = Allscripts5. $1.2B = Epic6. $900M (est) - GE Healthcare7. $545M = Meditech8. $353M = NextGen9. $174M = CPSI 10. $170M = QuadraMed11. $160M = Keane12. $110M = HMS13. $70M (est) = Healthland

Another 44 Year Old!• Thanks to feedback from Sheldon Dorenfest, easily the most

knowledgeable expert in our industry (whose “3000 Guide” was the source for HIMSS Analytics), below is a corrected version of the macro-level time line showing the roots of all 13 of today’s leading HIS vendors (turns out HBO wasn’t formed until 1975)

• I was amazed to learn when researching the roots of IDX, the source of GE’s “Centricity Enterprise” HIS, that it too started way back in 1969, the same year as Meditech, SMS and Compucare.

Acquisition-itis• GE’s roots are as complex as Halley’s novel, so we’ll just trace

the core of its “Centricity Enterprise” HIS; I’d need a blog as long as Mr. HIS-Talk’s to cover all of the many ancillary systems they acquired over the years to create their product line, including:

Company Acquired Date(New Name)

– Lockheed Martin/LORAL 1997 (Centricity PACS)

– Marquette Medical Systems 1998 (Centricity Perinatal)

– Applicare 1999(Centricity PACS)

– Micro Medical 2000(Centricity CVIS)

– 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)

Northern Roots• The core of GE Healthcare’s HIS came from another company

formed in the frozen northlands (what is it with ice and HIS??): IDX, acquired by GE in 2006 to put it on the HIS map. IDX themselves has built & acquired a wide array of HIS products which GE renamed with one of their “Centricity” monikers:

Product (New Name)IDX Flowcast (Centricity Business)IDX Groupcast (Centricity Group

Management)IDX Carecast (Centricity Enterprise)IDX Patient Online (Centricity Patient

Online)IDX Referring Practice (Centricity Referring Practice)IDX eCommerce Services (Centricity EDI Services)IDX Web Framework (Centricity Web Framework)IDX Imagecast (Centricity RIS-IC)

So Who is “BDP?”• You mean you never heard of “Burlington Data Processing?”

Neither did I, and it’s only one of many surprises I learned when researching the roots of IDX. It all started on a basketball team!

• It’s so cold at Saint Michael's College in Vermont that they concentrate on indoor sports like basketball, and in the 1960s, two young hoopsters played ball together, then both joined IBM upon graduation.

• (Another pattern in HIS-tory: how many HIS founders started as big blue sales reps, like Jim Macaleer & Harvey Wilson of SMS)

• These two former ST. Mike’s teammates left IBM on June 2 of 1969 and using $12,500 of their own savings, formed BDP:

• Robert Hoehl (on left)• Richard E. Tarrant (right)

Diverse Markets• Like so many other HIS start-ups, BDP at first served varied vertical

markets, processing accounting, billing, and payroll for many firms.• BDP quickly concentrated on the healthcare industry. In its June

1998 issue, Business Digest revisited a 1985 article about Hoehl and Tarrant that included comments from Dr. Henry Tufo, one of BDP's first customers. Tufo recalled how BDP outbid a number of national firms to build a system for the new University Health Center during the 1970s. Joking that their low bid may have stemmed from a relative lack of industry experience,

Tufo praised the two entrepreneurs, calling Hoehl "the best practical computer mind I've ever run into" and stating that Tarrant "understands his business and has the talent to sell ice cream to the Eskimos.”• That sure ties in with frozen Vermont!

Regulatory Complexity• Probably as a result of their work with Dr. Tufo, in 1970, BDP

rolled out what it described as the first “open item” physician billing system. The following year the company declared that the healthcare industry would be its specialty and it embarked on a path of steady growth that continued into the late 1970s.– So what’s an “open item?” Hospitals had it relatively easy with

their bills, which roll hundreds of charges into one green 1453 bill, which Medicare Part A, Blue Cross, etc., then paid all or part of based on a per diem or % (no DRGs back then).

– Physician billers go mad as Medicare Part B, Blue Shield, etc., hunt and peck through every charge on their bills (white “1554” bills back then), paying some in full, some in part, and rejecting others… Each charge is “open” until settled by itself.

• So Hoehl & Tarrant were on to something: writing a billing and AR system that treated each charge as an open item, not one big bill.

Next Week• It turns out Hoehl & Tarrant weren’t the

only ones helping physicians with these accounting challenges: they soon ran across a competitor in nearby Boston that was using daring DEC minicomputers to do what BDP was doing on stodgy old IBM 360 series mainframes. Like BDP, they had 2 founders:

• Their names read like a “who’s who” in IT circles today; do you recognize them and know where they ended up?- Paul Egerman (on the left)- Terry Ragon (on the right)

• When you hear what these two guys eventually got into, it almost makes GE pale by comparison! Stay tuned…