H.I.S.-tory

by Vince Ciotti

Episode #91: GE Healthcare

Part 4© 2013 by H.I.S. Professionals, LLC, all rights reserved.

The Oldest HIS Vendor?• Thanks to Jim Pesce, VP over McKesson’s HIS products, we pick up

the story of how GE began its HIS ventures several years before the three oldest current HIS vendors were founded back in 1969: – Compucare, Shared Medical Systems, and Meditech.

• You may remember Dr. Octo Barnett’s early project at MIT that was the HIS baptism for Meditech’s founder Neal Pappalardo. Turns out, Jim Pesce joined GE Healthcare way back then too:– “Actually started up in 1966. Was a start up funded by

Cambridge, MA based engineering firm Bolt Baranek and Newman. They were building the internet for healthcare. The technology couldn't support their vision. GE took over funding at end of 1967. GE then sold the system to HCA in 1971 when the entire team, except Pesce relocated to Nashville. The system which was financials only is the home grown billing system HCA still uses today... Imagine that!”

The Sleeping Giant…• In fact, HCA is not alone in using 1960s technology in 2013: – Hundreds of hospitals still run Siemens “Invision,” with TCE

(Transmission & Control Error) reports from 1960’s SHAS.– And hundreds more are still running Meditech’s “Magic,” with

roots that go back thru MIIS to Dr. Octo Barnett’s MUMPS…• What’s germane to our HIS-tory is

GE got out of HIS in 1971, and stayed out for several decades, ending any claim to being one of the oldest continuous HIS vendors.

• Then, in the late 90s, the sleeping electronics giant re-entered the HIS industry with a vengeance, using its enormous capital assets to fund a series of acquisitions of HIS firms.

Roaring Back, 20 Years Later• As the time line below illustrates, once GE woke up in 1997, it

went on a buying binge, gobbling up a slew of niche players:Company Acquired Date

(New Name)– Lockheed Martin/LORAL 1997 (Centricity

PACS)– Marquette Medical Systems 1998

(Centricity Perinatal)– Per-Se RIS 2001

(Centricity RIS )– iPath ORMIS 2002

(Centricity Perioperative)– BDM 2002

(Centricity Pharmacy)– MedicaLogic Logician 2002 (Centricity Physician

Office EMR)– Millbrook 2002

(Centricity Physician Office PM)– TripleG 2003

(Centricity Lab)

The Net is CAST• The biggest acquisition of all was was IDX in 2005, for $1.2B, who

had themselves acquired a full suite of hospital & ancillary systems, all renamed as part of the PHAMIS “cast” series of product names.

• So GE renamed each with one of its own “Centricity” monikers:IDX Name (GE Name)Flowcast Centricity BusinessGroupcast Centricity Group Mgmt.Carecast Centricity EnterpriseImagecast Centricity RIS-IC

• Most importantly, just like other acquisition-oriented firms such as HBOC, Eclipsys, Allscripts, etc., GE set about integrating the most important components of any HIS system: marketing material! Vendor HQ sales mavens churn out “seamlessly” integrated:– Brochures, PowerPoints, Proposals, Contracts, Invoices, etc.

• Some vendors even interface their disparate HIS acquisitions…

Impressive Financials• Per the chart below, GE Healthcare grew nicely from these HIS

acquisitions, and adding IDX’s ≈$500M in annual revenue at the time of the takeover made GE an overnight $1B+ HIS player!– They suddenly ranked 4th behind McKesson, Siemens & Cerner

• GE could offer both “Total HIS” (financial, clinical & ancillaries) as well as a full practice management suite (financial & clinicals).

• All under a fully integrated set of demos, proposals, ppt file, etc. Like other acquiring vendors, these products ran on a way array of hardware platforms, OS, data bases and programming languages…

Sales Stars• To head up sales of their

red hot HIS division, GE recruited Frank Pecaitis, sales superstar during QuadraMed’s halcyon days of the 90s, who also helped put MedSphere’s “OpenVista” on the map.

• Here’s GE’s demo dudes & dollies at our 2009 “HIS Buyers Seminar” in Dallas:

• You name it, hospital or practice system, and they could present it – on a seamlessly integrated ppt!

GE’s Apogee…• By the end of the decade, GE

hit an estimated $1B+ in HIT revenue from a large client base of ≈100 hospitals and over 1K physician groups.

• But then something happened to GE as well as Horizon, Soarian, Sunrise, Millennium, etc. They ran upon an “epic” competitor that dominated the large AMC/IDN world...

• Frank left, revenues slacked, and they not only lost large hospital sales, but started to lose many large Centricity clients as well to Ms. Judy.

A “Caradigm” Shift• There were high hopes for GE’s 2009 joint venture with IHC,

creators of “HELP” years ago. To quote the Salt Lake City Tribune:– “In early 2009, General Electric announced a $3 billion

investment in new medical technology that involved a partnership between GE Healthcare and Utah’s Intermountain Healthcare to create a top-line electronic medical-record system. The Web-based record system was designed to help doctors and nurses avoid medical errors and waste, while also creating an online record for patients.”

• Then, in March of this year came the surprise announcement:– “Caradigm, a joint venture formed 10 months ago by GE

Healthcare and Microsoft, has laid off approximately 70 percent of its Utah workforce. The layoff, which took place on Wednesday at the company’s office in Murray, affected between 40 and 50 employees.”

Beginning of their 2nd Perigee?• In our annual ranking of HIS vendors by annual revenue, we

estimate GE has fallen several positions since their post-IDX peak.• They even sold their RX system back to BDM in March! Is it the

start of second retreat from the HIS biz? If I live long enough, I’ll revisit this prediction in a 2023 HIS-talk HIS-tory episode on GE…

• Meanwhile, here’s the 47-year picture of GE’s HIS ups & downs: