Looking out over the sprawling Siemens Healthcare campus in a suburban office park outside Philadelphia, Janet Dillione admits that the acquisitions, integration and product development of the last several years have not gone as smoothly or as quickly as anyone at Siemens would have liked.
But without pausing, the CEO of the Health Services business unit adds that she wouldn't trade places with any of her competitors.
“The very good news is that we've already made the technology transition that many others are now going to have to make,” she says. “That's a good feeling for us to have - that while we're challenged to adapt to a lot of other things, we've gotten over that technology hump.”
That hump, as she sees it, was the development of Soarian, a native Web IT platform - both clinical and financial - driven by embedded workflow technology. Now perhaps the bigger challenge is converting the large customer base still on Siemens' earlier product line, Invision, to Soarian.
Besides rolling out the Soarian platform, Siemens also has made several recent acquisitions in the diagnostics field, including Dade Behring, Diagnostic Products Corp., and Bayer Diagnostics. Overall, Siemens Healthcare now has 13 product lines in 30 countries. Dillione runs Health Services, the health IT arm based in Malvern, Pa.
The Germany-based parent company's executives believe their long-term vision of integrating imaging and diagnostics with a strong health IT platform will pay dividends in an era when people may soon be able to have their entire genetic sequence mapped for $100. “How all that patient genetic information interfaces with the healthcare system has huge implications,” says Sam Brandt, M.D., a Siemens vice president and chief medical informatics officer. “That's a game changer.”
Dillione sees herself as having two missions: “One is to compete against my standard competitors - pure HIS players such as McKesson, Cerner, and Epic. The other is to be cognizant of the fact that we're actually building a larger IT platform so that we'll be able to play in that future world of personalized medicine.”
The fact that Siemens can offer the soup-to-nuts approach with imaging and diagnostics such as in-vitro tests and blood gas analyzers - in addition to core clinical software - is no doubt a benefit, and the new Soarian technology gets good reviews from its early users. But did the drawn-out product development process raise concerns among potential customers?
After Siemens bought Shared Medical Systems (SMS) for about $2.1 billion in 2000, many people in the industry believed it would provide the discipline to help SMS deliver projects on time and budget, a perception that company had struggled with, notes Kent Gale, founder and chairman of research firm KLAS (Orem, Utah). “Well, here we are in 2009 and we are just seeing the fruits of that,” he says. The hospitals using Soarian Financials love it, Gale notes, and the customers using Soarian Clinicals like its capabilities. For those customers, it validates the wait, and they believe the company has come through this transition with a strong product line, he adds. Siemens says Soarian Clinicals has 95 U.S. customers, representing 166 facilities, and Soarian Financials has 27 U.S. customers.
If adoption of Soarian has been slow, Siemens has nevertheless been very effective at halting the exodus of its customer base to competitors.
“Pre-Soarian, I was getting calls every other week from Invision customers who were dissatisfied and looking at other vendors,” says Thomas Handler, M.D., research director of Gartner's healthcare provider services. “Once Soarian was announced, those calls stopped, and the customers decided to wait and see. But that was five years ago,” he adds. “Now they call and ask, ‘When is this going to be real?’ But they still aren't talking about leaving for other vendors.”
Several developments have both strong positives and some negatives for Siemens customers to weigh, Gale maintains.
The company's longevity and long-term focus is a huge positive, he says. In addition, many early users have reported being surprised at how good Soarian Financials actually is. However, Gale claims Siemens has yet to prove Soarian Clinicals' CPOE module works well, which could be a stumbling block. Likewise, many organizations are excited about Soarian's workflow capabilities. Yet Gale says customers want those capabilities to extend to the ambulatory setting, and he notes that Siemens has postponed work on the ambulatory side of Soarian.
Welcome to Malvernia
Arriving at the Siemens headquarters, which Dillione jokingly refers to as “Malvernia,” visitors might momentarily mistake it for engineering department buildings on a university campus. Young people arrive in twos and threes, many in jeans and golf shirts. They walk across manicured green expanses from vast parking lots. But inside, the offices offer a sleeker and more futuristic feel, with security badges required to open every door. The walls are adorned with flat-panel TVs displaying corporate information.
For such a large company, one of the challenges is keeping all the moving parts in sync, especially when offices are spread across the country and around the globe.
For instance, the ultrasound group is in Northern California, molecular imaging is in Chicago, and Siemens corporate research is in Princeton, N.J. Other units are located in Europe. The Malvern site also is home to the world's largest healthcare remote hosting data center, which processes hundreds of millions of transactions a day.
Brandt describes a matrix structure that exists within Siemens to make sure the company isn't just looking at a problem from a single vantage point - like how it can do better CT scans. “We also have units based on health fields such as cardiology and neurology looking at how we can do a better job of solving specific problems in their field.”
Among Siemens employees, there's a focus on collaboration and creating workspaces that foster it, says Brandt, who adds that the corporate structure is non-hierarchical. There are online guides to a knowledge base of competencies so he can locate a person in the company with specific expertise, he says, but there also exist informal networks of friends - people who have worked at Siemens for most of their careers.
Yet, to others, the culture of Siemens Healthcare isn't clear. Dillione herself described it as “opaque” to outsiders because the health IT group is part of such a large multinational corporation.
Adds KLAS' Gale, “After the Siemens purchase and changes in management, the trusted relationship that existed between SMS execs and hospital organizations has never been rebuilt. The culture is Janet. She is the last one who is still a connection to SMS, and she does a terrific job of flying around the world keeping people who are nervous about Soarian on board.”
Siemens has nurtured research partnerships with some leading hospital customers. The 148-bed Newport Hospital in Rhode Island, which is one of only 42 U.S. hospitals to reach Stage 6 of the HIMSS Analytics EMR Adoption Model, is a longtime Invision customer. And though the organization hasn't yet switched, or even made a commitment to do so, its executives are talking to Siemens about Soarian. Carole Cotter, CIO of Lifespan, Newport's parent company, says Siemens and Lifespan are good at solving problems together. “We have access to their top executives,” says Cotter. “We are able to pick up the phone and talk about Soarian and the future of health IT. I think our working relationship really transcends the usual vendor-customer relationship.”
Integrated health system Partners Healthcare in Boston is beginning an implementation of Soarian Financials. “We appreciated the embedded rules engines and the built-in intelligence,” says John Glaser, Ph.D., vice president and CIO at Partners. “These are extraordinarily important features for us.”
Partners is also working with Siemens on a Web services approach to software development, Glaser says. “We are developing a set of services, for instance, on medication list reconciliation, to improve agility and interoperability,” he adds. “We have a common vision and a set of smart people on both sides. We expect to target several dozen services in a service-oriented architecture.”
Asked why CIOs might take a wait-and-see attitude toward Soarian, Glaser notes that most are quite conservative. “They will be ultra-cautious about technology that is yet to be proven or that has had a rocky track record, and I think Siemens has had some rocky times over the years,” he says. “Most health IT vendors go through that. Anytime you take a major suite of applications and recast it from the ground up, you are in for a hell of a ride that is going to be bumpier than you'd like. There are both advantages and costs to being a pioneer.”
If Dillione is frustrated by the challenges facing Siemens, she doesn't show it. There is real enthusiasm in her voice when she describes walking the floors of hospitals to see Siemens' software in use. “To me, the best thing is when I hear a nurse or doctor say, ‘That's cool, I like using that.’ That's when you get jazzed, right? That's when you start to get the adrenaline, and say ‘Look at what we've built.’”