INDUSTRY-EXCLUSIVE: Steven Tolle on Merge Healthcare’s Current and Future Prospects

The menu option is a little bit more complicated, because it says that 10 percent of images have to be available electronically using certified technology. The problem is that no vendor knows which 10 percent the doctor wants to see. So the practical reality is that you have to enable 100 percent of images. Every hospital has three circles of doctors: first circle is the ones you own. The second circle is doctors with tight affiliations, such as those collaborating through an ACO, etc. It’s that third circle that is worrisome, because it’s doctors with fewer close ties. You’re trying to sign them up for HIEs [health information exchanges], etc., but it’s hard to prove return on investment.

Take for example the Chicago metropolitan area: there are 100 imaging providers in this area, including the hospitals and imaging centers, 10,000 physicians, and 100 different EMR vendors, or versions of products. So if you did the math and let’s say all those doctors went for meaningful use; you’d have to build 1 million interfaces! And it’s never going to happen. So there’s going to be a real-world wake-up call very quickly that says, how will I do this without losing that referring physician’s loyalty? We think we can capitalize on that, but it’s just a matter of how fast that market will open. Because there’s a mandate as part of meaningful use, and a mandate as part of EMR adoption that will drive this, regardless. We just didn’t anticipate the sequester. So we’re still bullish on the opportunity, but this was the right time to refocus and to reorganize our sales strategy and teams.