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Coming in at number five in this year’s HCI 100, Siemens Healthcare is clearly a powerhouse among the industry’s vendors. What’s more, the organization is one of only two vendors that offer core clinical functionality to hospitals, such as EMR and CPOE, while also playing heavily in the PACS, RIS and modality space (the other being GE Healthcare IT). Recently, HCI Editor-in-Chief Anthony Guerra had a chance to chat with CEO Janet Dillione about where the company stands – and is going – in the industry’s HITECH-fueled environment.
GUERRA: Would you say it might as well be called Soarian pharmacy at this point or should we not go that far?
DILLIONE: I think if I went that far, the pundits in the industry would scream at me. Potentially, someday it might be appropriate, but what I have told our sales force and the R&D group is to stop apologizing. We’ve made extraordinary investments here, and I tell them that we’ve done a very good job. As a company, we will move forward now and continue to tackle other hills that we have. We did protect the customers who had Pharmacy installed; we did protect their investment and I think that’s a big deal.
GUERRA: Going back to the KLAS Midterm Performance Review, Invision Financials was below the industry average, you scored 68.18, the industry average is 74.9. Soarian Clinicals came in at 72.17, also slightly below the industry average of 73.41. What do you think about those scores, or do you not put major emphasis on them?
DILLIONE: I would say we put a tremendous amount of emphasis on them – I personally do, as well as my management team. It’s a metric for every member of my team. That’s how seriously we take it, and that metric effects their compensation. So, we take it very seriously because, right now, KLAS has a unique position in the market. They have a voice that folks are listening to, so you have to acknowledge that.
I think every one of the vendors would love to have higher scores. Over the last two years, we’ve really tried to peel the onion and understand, not only the mechanics of the surveying process with KLAS, but the mechanics of what we have to do to get the scores to improve. One thing that is tough is KLAS’s methodology of holding on to data for 12 months or so, so that survey doesn’t represent this moment in time, it actually represents a little bit of a historical view.
It’s tough for us because we are the new kid on the block. In the telecom or the chip industry, the timeframes are different, but in the HIT industry we are the new product line, and it’s tough to be the new kid as I have often said. We’re always going to be a new kid until there’s a new kid.
I think Kent (Gale – KLAS Founder and Chairman of the Board), to his credit, has pointed out in some of the reports that Siemens has a customer base on different versions – some are on C3, C4, C5, C6 – because it’s a new product line and we are rolling out software very, very quickly. I think now you’re starting to see that C5 is well established out there and by Sept. 30, I think we will have over 30 customers live on C6; we just went GA (general availability) in April. So, we are moving fast here to get everybody up to the most current release and I think, quite frankly, what you’re going to see are those KLAS scores logically go up with that most recent software as we get the entire customer base migrated to it. It’s one of the positives with ARRA, it really helps make it compelling when we say, “Come on everybody, let’s get current, let’s get upgraded.”
Again, some of the issues have to do with the KLAS methodologies, some of it is us. Clearly, we have had some tough, rocky years early on with the earlier releases. I’m happy to say we don’t see that with the last two releases. C6 looks extremely good and Soarian Financials has been extremely good for the last several rounds.
GUERRA: Regarding your positioning in the market, I had been under the impression that a company like Siemens, and I would put GE in the same category, was extremely attractive to a hospital system that wanted to buy a lot from one company. You have quite an extensive product line, which even extends to the imaging modalities. But some CIOs have told me that PACS and RIS, and especially the modalities, are bolt-on plug-and-play, so it’s not that important to get them from the same vendor providing your core clinicals. What are your thoughts on that?
DILLIONE: I think that it definitely gives us a leg up to the more strategic buyer who’s looking for a company like Siemens Healthcare that pours an enormous amount of R&D into our products. You know, we just don’t invest in healthcare IT but into MRIs and CTs, and diagnostics. I would suspect this is similar to some of the other large vendors where the hospitals are really not just customers anymore, they are partners. You have such a tight relationship. It’s like a marriage; you hold each other accountable, but you’re there for the long haul.
In terms of our vision, Siemens didn’t acquire SMS (2000) just to have a HIS company. What Siemens really was looking for was not just an IT competency, a market share, a customer position, but really a platform upon which to deliver personalized healthcare. I tell folks that it’s been frustrating because it’s taken us longer. It’s been hard to build Soarian, but we weren’t building Soarian just for my business unit, we were building it as an asset to Siemens Healthcare. It’s the platform that we’re putting out there to build out software as we work to deliver personalized medicine.
And I’d say in the last 10 years Siemens has spent $17 billion on acquisitions, and the most recent ones are DPC Diagnostics. I think you’re looking at Siemens Healthcare as a company that’s entering its second generation of integration. The first was to get the acquisitions under its belt to make sure that businesses were established and stabilized. I can tell you we’re now turning up the engines because it’s time to realize the value proposition, the value from integration. Again, the Holy Grail, the real pursuit here, is personalized medicine. It’s having all those bytes from the images and the biomarkers and the other data from the diagnostics available on an IT platform, so that we can push that personalized information to the clinicians.
GUERRA: I had seen an article recently in “Genetics in Medicine” that said most of the EHR software out there is not equipped to handle genetic information. Does that make sense?
DILLIONE: I loved that article. We’ve been working with folks, like the University in Manchester, for several years now. We’re now in our fifth year of putting knowledge structures inside Soarian, with the "Plan of Care" release that came out with C6. It’s actually the first beginnings of what will become GA software, but again, it’s going to take multiple, multiple years, and you’ll need certain architectural structures to be able to accommodate the genetic information. It is one of the earliest reasons why, again, we sat in conference rooms early on and had to decide if we were going to exploit Invision or build out a new product line.
I was in the room for the decision, and that was one of the reasons why we were so fanatical that it had to go to the Web. The vision here was around personalized medicine, and we fundamentally believe that the medical knowledge will not be owned by Siemens. It will come from many, many different sources around the globe, with potentially much of it coming from the public domain because of the funding by the NIH. We want it to have an architecture that was open enough so people could, “Go get it and bring it in.” And that has been a part of our decision from the first day, so we’ve quietly been investing in that over the last several years. I’d be shocked if you talked to (GE President and CEO) Vishal (Wanchoo) and you didn’t have similar comments and ideas, but that’s what Siemens and GE do. We’re not just in this for the IT-ness and for the EHR, we’re in it for that larger healthcare goal.
GUERRA: When you look at the Siemens offerings, one thing that stands out to me would be the lack of products in the ambulatory EHR line. Do you plan on building out such a product or pre-integrating with the more prominent vendors in that space?
DILLIONE: Well, we have an agreement with NextGen that has gone very well. They’re a good group. Pat Cline is a very smart man that runs a very good company. We host NextGen. They’re live, running out of our ASP cloud computing center, if you will, in Malvern. It’s been a very good relationship, and we have interoperability across Invision, Soarian, and NextGen and we will continue to make those investments, but the market is the market. We will always watch the market and do what we need to do to stay competitive. Again, we don’t have an intention of being a short-term player here. We see the health systems building out, and we’ll continue to make decisions to support our future in that market.
But I would also offer another observation – If you look at what the Meaningful Use Workgroup, and especially the HIT Policy Committee and others are saying, they’re sending messages to the vendors and they’re sending messages to the providers. Along with privacy and security, I would say the third most compelling, loudest message is interoperability. And again, we have been very, very vocal over the past several years. We are open, we are standards-based, we will interoperate. I will not go into a customer who had an investment in NextGen or Allscripts or eClinicalWorks and insist that they rip it out. That’s just not who we are.
So, regardless of whether I have my own (ambulatory) EMR or not, we will be open and we will support that interoperability and that CCD because there is not enough money in the budget for anyone to insist that the U.S. healthcare system let go of the investments it’s already made in IT automation. There’s not enough IT analysts to do it, there’s just not enough time and there would be absolutely zero patient value.
I understand your question, but I also would force others to say how strongly they support the openness and the standards and the goals of interoperability, because that is simply the market we all must play in. We just have to respect the investments customers have made.