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EUROPE: U.S. VENDORS WEIGH RISKS

August 1, 1998
by Jeffrey Elliott
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EUROPE: U.S. VENDORS WEIGH RISKS

by Jeffrey Elliott

Europe is teetering on momentous change as it enters the new millennium, most notably: expanding the number of countries in the European Union and converting to a common currency. But the impact of these events is still unclear and the economic uncertainties have put much of the market for healthcare IT on hold, says Ray Falci, a healthcare IT analyst for Bear Stearns in New York.

Healthcare IT companies face an additional challenge in Europe: Selling products to diverse, government-operated healthcare systems that are well behind the U.S. in terms of automation. Combined, these factors are affecting corporate earnings.

After posting international profits of $7.5 million and $6.1 million in 1995 and 1996, respectively, Malvern, Pa.-based SMS, the U.S. healthcare IT firm with the most overseas revenue, saw a complete reversal in 1997. SMS reported a $6.7 million loss in its international operations on revenues of $108 million--a major portion of that business in Europe.

The challenges for U.S. healthcare IT developers are slow procurement cycles and the lack of critical mass in Europe, says Phil Birchall, U.K. sales director for database company Intersystems Corp. "The U.S. is a far more consistent market with more spending."

Cognizant of economies of scale, many U.S. players have shown their skepticism. Kansas City, Mo.-based Cerner Corp., struggling with the bureaucratic purchasing system in healthcare, signed over its European marketing rights to Siemens Nixdorf Worldwide Health Systems Solutions Group in Stockholm, Sweden in 1996. Atlanta’s HBOC, even with its recent purchase of AT&T’s healthcare division in the U.K., is taking a cautious approach, choosing to establish distributor relationships in favor of investing heavily in European sales and marketing efforts, says president and co-COO Jay Gilbertson.

Even Misys Plc, the U.K.’s largest independent software developer, is seeking a more lucrative market for healthcare IT. The company, which already owned a healthcare software business in the U.K., is focusing most of its healthcare strategy on the U.S. market through practice management IS company Medic Computer Systems in Raleigh, N.C., which it acquired for more than $900 million in 1997. "Misys is very much a global business. If you’re trying to build a big business, it makes a great deal of sense to operate in a big market," says Medic CEO Mike O’Leary of Misys’ entrance to the U.S. market.

"I think the market is so big here, that it’s foolish not to focus on where you can do a better job," says IDX Systems Corp. CEO Richard Tarrant. The Burlington, Vt., software company has one international customer, a U.K. provider that IDX acquired when it purchased Phamis last year. Tarrant says his company will keep its eye on Europe, but has made no plans to market products there.

However, Falci believes there is potential in Europe, particularly for clinical data repositories and enterprisewide clinical systems. He cites a project that the U.K. is undertaking to implement a nationwide master patient index. But the only way for U.S. healthcare IT companies to have any success in Europe is through partnerships in each country, Birchall says. Regardless of European Union, countries will still be culturally independent. "It’s impossible for healthcare IT companies to have a canned solution in all of Europe," he says.

Jeffrey Elliott is business editor at Healthcare Informatics.


IRELAND HOSPITAL PARTNERS WITH U.S. ON IT

by Barbara Hesselgrave

A new state-of-the-art hospital in Ireland has teamed up with a U.S. healthcare organization to jump-start an aggressive 12-point IT strategy. Tallaght Hospital in Dublin--a 589-bed hospital formed from the consolidation of four healthcare facilities--struck an alliance with the University of Tennessee College of Pharmacy in November 1997. What began as a typical student exchange program evolved into a relationship where Tallaght became the European beta site for a pharmacy management system the college is joint marketing with developer Comprehensive Pharmacy System (CPS), Memphis, Tenn.

"In our discussion to link up with Tallaght, we learned that Tallaght was committed to becoming the European leader in pharmacy management," says Jim Gourley, dean of the UT College of Pharmacy. "We envisioned the opening of Tallaght as an ideal opportunity to test COMSTAT in a European environment." Gourley says the liaison is part of the pharmacy college’s ongoing initiative to become a global institution. The college has eight other foreign exchange programs.

COMSTAT is a Microsoft Windows-based software package that can interface with remote and host devices, hospital information systems and automated dispensing systems, as well as any other COMSTAT system around the world. The system will run on palm-top computers, and will provide pharmacists and clinicians with drug performance, outcomes, dispensing, drug interaction and disease management information, plus various options for report generation, according to Brendan Carr, Tallaght’s IT director. The system was scheduled to launch at the official June 21 opening of Tallaght, according to sources at press time.

The opening of the Tallaght Hospital signaled the unification of several disparate healthcare services, ending what was traditionally a "piece-work approach" to medical care. According to Neasa Kane, Tallaght’s communications coordinator, the merger is the first of its kind in Ireland to offer the full range of medical services for pediatric, adult and geriatric healthcare at one site. Tallaght operates as an NHS facility but will offer one 76-bed wing for privately-insured patients.

Crucial to the organization’s success is information technology: a 75-member team convened in 1995 to formulate the strategy. Tallaght’s new systems are needed to provide top-notch service to the 250,000 patient population, but also to facilitate the demands of managing information on a site that covers 41 acres of facilities, says Carr.

"As we were merging several facilities and services under one roof we were concerned about an effective interface for multiple sources of data because we are offering best-of-breed technologies for medical services," he says. To help with the integration challenge, the hospital will install the Cloverleaf interface engine from Healthdyne Information Enterprises, Inc., Marietta, Ga.

Other technologies include an order communications system from Bull Worldwide Information Systems, Billerica, Mass., which runs on a UNIX/Oracle platform, a PACS imaging system from Siemens Medical Systems, and a patient management system from U.S. consultancy KPMG Peat Marwick to handle inpatient and outpatient admissions, billing, chart-tracking and scheduling. Tallaght plans on installing roughly 700 Windows NT-based PCs throughout the organization, says Carr.

Barbara Hesselgrave is a freelance writer specializing in healthcare, based in northern Virginia.


XML EMERGING AS GLOBAL HEALTHCARE LANGUAGE

by Bethany Schroeder

In the year since its development, eXtensible Markup Language (XML) has become widely recognized for its potential impact on publishing, particularly on the Web. Industries and governments in Europe and the U.S. hope that XML will enhance online communication and save money in the process. Some pundits believe that XML is perhaps the most important technological event since the development of the silicon chip.

XML and its associated applications were hot topics at the 1998 Graphics Communication Association conference in Paris. As more publishing occurs online, publishers are looking for faster, cheaper ways of presenting, storing, retrieving and reusing information.

Hypertext Markup Language (HTML), a hard-wired limited tag set developed in the 1990s for the Internet, solved some of the early problems of displaying information, but HTML isn’t versatile enough to make information easily reusable for different audiences. On the other hand, XML is a simplified subset of Standard Generalized Markup Language (SGML), an already established standard (ISO 8879) that has saved millions of dollars in publishing costs for the aerospace and automotive industries, to name two.

XML also is getting attention in the medical community. Health Level Seven (HL7), an international medical standards organization, recently established a Special Interest Group for XML. The Paris conference included a day-long HL7 SGML/XML workshop devoted to standards activities and applications in healthcare. Presenters discussed the Kona architecture, created for the exchange of clinical documents, and conducted demonstrations of SGML-enabled electronic medical records from the U.K.’s Oswestry project--a documentation project designed to help implement the electronic patient record--and the Swedish Institute for Health Services.

One presentation addressed the use of XML to integrate heterogeneous computer systems in a multi-centered clinical study in Switzerland. Medical Markup Language (MML), a SGML tag set, has been used to develop an electronic medical record in Japan. The European Committee for Standardization (CEN) also is incorporating XML in its standards development activities, and has established a task force to investigate messaging formats in commerce and medicine.

When XML applications have been released--most are still in development--XML will be able to organize point-of-care patient information as well as the records now stored in databases. Because XML is an open standard, it is vendor, device and system-independent. The chief attractions of the technology to XML experts are its media-independence and support of all languages.

For slides of the Paris conference presentations, navigate to: www.med.uni-giessen.de/imi/SGMLworkshop/Final/ welcome.htm. In addition, the XML specification is available at: www.w3c. org/xml.

Bethany Schroeder is a writer, educator and healthcare consultant who specializes in home care, organizational development and information services.


INTERNET GROWS IN LATIN AMERICAN HEALTHCARE

by Polly Schneider

In 1997 Latin American corporations spent a combined US$1 billion on Web sites and Internet technology, according to U.S. market research firm International Data Corp., Framingham, Mass. The spread of Internet technology also is occurring in healthcare through a number of public/private initiatives to jump start information technology in the region.

Informatics 2000 is a regionwide InterAmerica Development Bank project that aims to build an advanced telecommunications and IT infrastructure focusing on all major industries including healthcare. U.S. telecommunications firms, medical centers, managed care organizations and major high-tech firms including Sun Microsystems, IBM, Kodak and Hughes Satellite are participating in the healthcare portion of Informatics 2000.

The Health Information Infrastructure Collaboratory--a separate project--is bringing together private industry, academia and government to create Web-based "virtual organization" tools for collaboration on healthcare IT, according to Michael McDonald, DrPH, president of Global Health Initiatives, Inc. (GHI), a Potomac, Md.-based healthcare IT consulting firm helping to build and facilitate the collaboratory. GHI specializes in community-based healthcare applications.

The foundation of the collaboratory will be an interactive Web site where healthcare informaticians can meet and exchange information about developments in the field. McDonald says the site will allow parties to build teams and work on projects online, conduct meetings or surveys, and access a multimedia environment.

"The idea is to create a rapid fertilization of health information system growth," McDonald says. He believes the collaboratory will help spread understanding of not only the technologies but also the socio-economic implications of applying technology to healthcare. Funding for the project is coming from private and public sources, and McDonald estimates a price tag of $20 million in three to four years.

The collaboratory is still in development but is being tested by the Medical Technology Policy Committee of the Institute of Electrical and Electronics Engineers (IEEE), the British Medical Journal and the Medical School of St. Kitts.

McDonald cites several factors leading to a burgeoning healthcare IT market in Latin America: a speedy adoption of cellular and satellite technology, rapid growth in Internet usage, and the breakdown of government monopolies. "The infrastructure down there will be totally different in 18 months," agrees Bruce Elder, worldwide healthcare industry manager for Sun Microsystems, Palo Alto, Calif.

Sun is providing servers for the collaboratory, and while Elder does not expect profits anytime soon from the investment, he thinks Sun will benefit long term from participating in the region’s infrastructure development efforts: "Promoting the Web is good for Sun." Elder acknowledges that many new technologies, including the Internet, are still unaffordable for most Latinos, and further development will depend on the political leadership in the region. "The public sector will be key to driving universal access to telecommunications and the Internet through subsidies."

McDonald says that most governments are interested in deploying new technologies, but do not have large coffers to support them. In a study on corporate Internet use in Latin America, IDC found that 92 percent of the companies surveyed had access to the Internet. However, only 16 percent of PCs in those companies were hooked up for Internet access, due to the high cost: users must pay per-minute charges on top of connection fees.

Still, market research shows aggressive growth in IT spending in Latin America. In the fourth quarter of 1997, PC sales grew by 20 percent, with total sales of US$1.6 billion, according to IT research firm Dataquest, San Jose, Calif. McDonald remains hopeful of what can be accomplished through initiatives like the collaboratory. "It’s amazing what can be done with a small amount of resources."

Polly Schneider is senior editor at Healthcare Informatics.

INTERNATIONAL WEB SITES

Britain Medical Informatics Society www.cs.man.ac.uk/mig/people/medicine/bmis/. An extensive site with links to other sites around the world and to U.K.-based resources.

Canadian Organization for Advancement of Computers in Health (COACH) www.coachorg.com/. This site gives general information about Canadian healthcare informatics, as well as a job exchange and annual conference information.

Danish Society for Medical Informatics www.dsmi.dk/. This site offers an overview of Danish accomplishments.

The Healthcare Informatics Society of Ireland www.mater.ie/hisi/hisi.htm. This extensive site includes a discussion of the year 2000 problem with links to articles and other sites, an extensive list of upcoming conferences and meetings for professional organizations worldwide.

Medical Informatics Homepage (Netherlands) www.mi.rulimburg.nl/mined.htm. This site offers links to other Dutch informatics sites, as well as international sites including the IMIA.

INTERNATIONAL DEALS

MediSolution, Ltd., a publicly-traded healthcare information systems and services firm based in Toronto, Canada, has signed a $7.8 million contract with the Samara Oncology Center in Samara, a southwestern town in Russia. The contract was awarded in partnership with Afcan, a Montreal-based healthcare construction firm that is building the 600-bed oncology center, scheduled to open in 1999. Financing is being arranged through the Export Development Corp. MediSolution provides software and services to more than 600 hospitals and institutions in Canada, as well as 6,000 physicians, pharmacists and other healthcare professionals through its practice management suite. (www.medisolution.com)

Networking giant Cisco Systems, San Jose, Calif., has signed an agreement to acquire CLASS Data Systems of Ra’anana, Israel and Cupertino, Calif. CLASS Data’s products allow network managers to allocate network resources according to company policies and priorities. Under the terms of the agreement, $50 million of Cisco shares will be exchanged for all outstanding shares and options of CLASS Data, according to a statement from Cisco. (www.cisco.com)

Telemedicine provider Siemens Information Systems has established a software center in Bangalore, India, to develop diagnostic imaging software, hospital information systems and software testing tools. Siemens Information Systems is a joint venture between Siemens Ltd., India, and Siemens Nixdorf Informationssysteme AG, Germany. (www.siemens.com)

INTERNATIONAL CALENDAR OF EVENTS

August 18-22, Medinfo ’98: Global Health Networking: A Vision for the Next Millennium, Hotel Inter-Continental, Seoul, Korea Exhibition Center. The Korean Society of Medical Informatics: (800) 641-8181, pco@medinfo.or.kr.

August 31-September 1, 15th IFIP World Computer Congress: The Global Information Society on the Way to the Next Millennium, Vienna University of Technology, Austria. Austrian Computer Society: +43 1 512 0235, ifip98@ocg.or.at.

September 3-4, 15th IFIP World Computer Congress: The Global Information Society on the Way to the Next Millennium, Budapest University of Technology, Hungary. John V. Neumann Computer Society: +36 133 293 49, ifip98@neumann.hu.

September 14, Expo ’98 Telemedicine Conference, organized by EHTO, as an initiative of the EXPOACTS project in the programme ACTS/European Commission DG13, Lisbon, Portugal. European Health Telematics Observatory: http://ehto.dts.cet.pt/ehto/rgexpo/regist.htm.

September 14-16, Asian Health Congress ’98: Healthcare Management Asia & Telemedicine Asia, Shangri-La Hotel, Singapore. AIC Conferences: (65) 322 2725, cindy@aic-asia.com.

September 14-25, European Medical Informatics Course, sponsored by the EFMI Working Group 6 ’Training and Education’ and the IMIA Working Group 1 ’Health and Medical Informatics Education.’ EuroMISE Centre, Prague, The Czech Republic. EuroMISE Centre: +420(2) 6605 3640, golkova@euromise.cz.

October 1-3, EuroPAC ’98: 16th Annual Meeting of the EuroPACS Association, University and Management Pavilion, Barcelona, Spain. EuroPACS: +34 93 2746775, jpiquer@ar.vhebron.es.

October 6-10, EPRimp: Electronic Patient Records In Medical Practice, Joint Conference of IMIA Working Group 17. EMD 98, and Eurorec 98. Beurs World Trade Centre, Rotterdam, Netherlands. Hospital Information Systems and Care for Care Software & Consultancy: +3110 436 2882 (Fax).

October 7, Eurasia Online ’98 Conference: New Market Opportunities for Telematics Products and Services for Education and Training, Healthcare and Electronic Commerce, Almaty, Kazakhstan. Development of Markets for Telematics Products in Central Asia (DENEMA): www.katelco.com/UNESCO/online98en.html.

November 1-4, ITCH ’98: Information Technology in Community Health, Victoria Conference Centre, Victoria, B.C., Canada. Information Technology in Community Health (ITCH): (250) 721-8576, his@hsd.uvic.ca.

November 15-18, TEHRE ’98. Toward an Electronic Health Record Europe ’98: Evaluating Shared Care & Managed Care, The Cumberland Hotel, London. Centre for the Advancement of Electronic Health Records Ltd. (CAEHR): +44(0)1291 629379.

November 16-19, Mednet ’98: The World Congress On The Internet in Medicine, St Thomas’ Hospital campus of the Guy’s, King’s and St Thomas’ School of Medicine, London. The Society for the Internet in Medicine: +44(0)171 928 9292.

December 8-11, Arab Health IT ’98: The International Hospital, Medical Equipment & Services Exhibition, Dubai World Trade Centre, United Arab Emirates. IIR Exhibitions in collaboration with The Department of Health and Medical Services of Dubai: +44(0)171 808 6401.

December 9-12, Summit on International Managed Care Trends, Fountainbleu Hotel, Miami Beach, Fla., USA. American Association of Health Plans and Academy for International Health Studies: (202) 778-3269.

December 9-12, Surgery Meets High Tech in the Information Age: Tele-Teaching, Tele-Education… Munich, Germany: (352) 31 40 80, roger.welter@santel.lu.



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