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: What are some of the main projects Siemens is working on?
DILLIONE: Obviously, the number one topic right now is ARRA, but with or without ARRA, we would have been very, very busy anyway because both on the clinical and financial side we’re rolling out very large releases to our customers. We also have a product we don’t talk much about that we roll out in the rest of the world. It has a very low TCO (total cost of ownership) that we take to the emerging market, which is also a focus for us. We’re gearing up to enter China and other markets with that; we’re already live with that product line in South Africa and Egypt and Turkey.
As I like to tell people, a lot of times I think we are, as you would imagine, very judgmental and tough on ourselves. Clearly, Soarian has been harder than we expected. It’s taking longer and costing more. When you take a closer look though, and look at who has launched new product lines in the last 10 years, you see that we’ve not done it once, we’ve done it twice. When I need a moment of sanity I remind myself of that and understand why this is so hard.
GUERRA: How would you describe the way you’re bringing customers on to Soarian? Are you being aggressive? Are you gently nudging them along, or can they stay on Invision as long as they want?
DILLIONE: Obviously, they can stay. Invision will be around a very, very long time. We actually took a look at it years ago and it almost gets silly when you look at how much professional services and resources it would take to move such a large customer base (onto Soarian) – the numbers are stunning. So it will be a customer choice issue.
However, what we are doing with ARRA is each and every customer of ours is getting an ARRA roadmap. We’re going in and doing an assessment of their current EHR status, where are they: red, green, yellow and, given that, what do they must do to make sure they’re in a position for meaningful use.
Some of the customers – for us and I’m sure other vendors – will be fine no matter how meaningful use is defined. But for the other customers, you then start to have a discussion about the clinical investment you need to make, do you want to continue to make it with Invision or is it time for you to transition to Soarian? And that usually becomes somewhat self-evident as you start to do that EHR assessment and then see the gaps that they’re looking to fill.
GUERRA: Are you trying that to make the point that it’s easier to get there with Soarian?
DILLIONE: No. I don’t know that it’s easier because it’s going to depend on where a customer is in terms of their own implementation status. Again, we have many Invision customers that will get meaningful use immediately. I think, certainly, the investments in Soarian are ones that a customer can make and make once, and it’s going to last them a very long time because Soarian is a newer product line. I mean there are certainly attributes in Soarian of usability, of openness, of the Web technology that are clear advantages when you’re trying to penetrate a clinical workplace and get your clinicians excited.
GUERRA: I read over the story David Raths did recently, and I was also looking at the KLAS midterm report and it seems you’ve got quite a bit more customers on Soarian Clinicals than on Soarian Financials. Does that mean you’re getting more adoption on the clinical side and is that because people don’t like to tamper with their revenue cycle?
DILLIONE: All of your above statements are true. I actually spent a good portion of my career on the revenue cycle side of healthcare and got into the financial side a few years ago. One of the interesting things about financials is that the decision making is a little bit more autocratic, because usually it’s a straight shot up through the CFO. Your supposition is correct; cash is king. Cash is a tremendously important asset right now. We find folks being extremely risk averse because the credit markets are so tight. So, cash is phenomenally important.
You also have a situation right now where there’s no doubt that with the limited capital available and the squeezing margins on customers they’re going to make their IT investments where they expect an opportunity to get those meaningful use dollars. If you really think about the CIO and the decisions that providers face, one of their most precious resources is their own staff. They’ve got a very fixed resource pool across which they can deploy technologies and get things done. And right now, with the incentives that the administration has put out there, those fixed resources, in a large majority of cases, are getting diverted to take care of the clinical business.
The other thing I would offer you is that the financial implementation is a more of a big bang. There’s no subtle, quiet migration across one nurse station at a time or one clinic at a time. It’s a kaboom.
GUERRA: Would customers that have upgraded on the clinical side but not the financial side – leaving them with a Soarian-Invision hybrid environment – be missing out on some functionality?
DILLIONE: Organizations that go up with Soarian HIS-wide get some integration that you can’t get in a mixed environment of Soarian and Invision. A lot of getting the benefit starts upfront with the way patient management and scheduling are automated in the full HIS environment. We expected this hybrid environment for awhile. We invested heavily in building the necessary bridges between the clinical front end and the financial backend to make sure it was a secure configuration for the customers. But yes, there are things that if they will go full (Soraian) HIS they will reap the benefits of, but we’re just going to have to be patient and wait for the market to make some of those moves.
GUERRA: We did a story recently looking at the pharmacy component of a clinical system. Many say that pharmacy is not something you want to get from a third party and integrate because it’s such a core part of what you’re doing. We know that in your products suite you have Siemens Pharmacy which over the years has been soundly integrated with Invision. Now, however, you are going to tie that in with Soarian rather than creating Soarian Pharmacy from scratch. Is it going to take some time to get all the bugs out of your Siemens Pharmacy/Soarian Clinicals integration or have you accomplished that?
DILLIONE: Anthony, have you been talking to my competitors? (laughing) Whenever I talk to new business prospects, this is usually the first or second question I get. Your suppositions are accurate in terms of the paramount significance of pharmacy to the medication-ordering process. There’s no doubt about it – I think pharmacy in this era has supplanted where lab was in the ’70s and ’80s as the key supporting system. Potentially, someday pharmacy will be so subsumed by orders, there’ll no longer be a distinction, similar to what you see happening a little bit in the recent PACS areas. This is when I get philosophical about software.
In terms of what we are doing, you are correct. Several years ago, when we were building out Soarian Clinicals, we faced a very critical decision point which was around pharmacy. On the original roadmap, there was a Soarian pharmacy idea that we would build it out on the Soarian architecture. As we were getting to that point in the roadmap, we started to talk to some customers, we started to bring folks in, and bells and whistles started to go off and they’d say, “What are you crazy? You can’t disrupt my environment. Come on, don’t make me tear out everything…” and so we took a step back. We had 400+ live Pharmacy customers at the time, and many of them had just upgraded to the recent versions of it. We took a step back and said, “Okay, what alternatives are there,” and we decided to pick the more evolutionary path, which was to continue on the Pharmacy module but invest over the next several years in extending it and integrating it into not only Invision, but also Soarian and MS4 (MedSeries).
That’s the path we’ve taken, and we’ve been making those investments for over three years now. I am happy to tell you that with the recent releases of Soarian Clinicals C6 and with the recent releases of Pharmacy, Soarian is now superior to Invision in terms of the integration point.
It took us quite a while to get there. I just reviewed some of these details with Gartner a few weeks ago, and I’m going to walk KLAS through the same thing, but we literally just attacked it from angles of not only data and data integration but also profit integration. So, if I am managing a hospital, how do I update the formulary, how seamless and integrated is that formulary update. We just literally went point by point and attacked the requirements to present an integrated view to the customers. This news is very fresh, hot off the presses. We’re actually just now cleaning up some of the sales tools to get our sales force comfortable with the message.
The test we ran was we took a look at the Invision CPOE sites that we have and we literally went through every order type supported across the integration of Invision and Pharmacy. In every instance, it’s matched the Invision integration, and in several instances exceeded it. I believe what we established was covering 97 percent of all potential order instances. As I said to Kent Gale, any commercial system out there will have some gap between the potentially, very, very complex order types coming right out of the R&D labs and pharma. So, getting to that percent and getting that covered is pretty darn exciting.