John Glaser is CEO of the Health Services Business of Siemens Healthcare.
You?ve been at Siemens for 18 months. How many of those days did you regret leaving Partners?
[Laughs] Actually, none. I was ready for a change. I am enjoying what I am doing and learning a lot still.
I feel like we?re making good progress here. We have work to do and areas we need to perform better, but this has been a real hoot and very interesting and rewarding in lots of ways. I miss my Partners colleagues dearly and will always have a part of my heart and soul in that organization, but I have been really pleased with the time that I?ve spent with Siemens.
What surprised you about what you thought the job was going to be like versus what it turned out to be like?
An example is that you can read about raising a kid, and then you can raise a kid. You can walk into a new situation with an intellectual understanding, and then there?s a feel to it that it is the part that you get used to. So in a way, there was nothing surprising.
What has been interesting is getting your head around a global market. What do you do in China, and what do you do in France and Spain and places like that? What has been interesting is to really appreciate the range of customers and hence the range of hospitals that are out there in the US ? big, little academic, non-academic, tightly integrated, loosely integrated ? and understanding how those differences are really quite important in what they?re trying to do.
There is getting adjusted to and becoming proficient at the Siemens way of doing budgets and HR and getting used to new methods, etc. There is nothing really surprising. What has been part of the challenge and enjoyment is getting the feel of it and getting the mastery of things that you understood at a book learning level, and now you understand at a practitioner level.
Do you think the CIOs out there in your travels view you as one of their own, or are you now just another vendor suit?
I think they view me as one of their own. They?re sophisticated folks. I?ll go into a setting and it?s old home week, recalling time you a spend at CHIME or HIMSS, things like that.?
But on the other hand, they have a job to do for their organization and have much to fulfill. While we?re good friends and colleagues, the conversation will turn to more vendor-like conversation, either new things to be done or issues to be addressed. I see both hats, and I probably wear both hats, too in the course of the conversation. I think there will always be that tie, friendship, colleagues that goes way back in the CIO profession. I think I still have a pretty darned good understanding of what their life is like, and that will probably never disappear either.
Word is your previous employer is going to be doing a system selection of some kind soon. Do you have any status of what?s going on with that?
They are doing a system selection, and we?re part of the selection process. It?s is probably not all that useful for me to go into more detail on that, other than they are doing one and we are part of it.
When we talked last, Soarian was being groomed as the rising star of Siemens. Now out of the blue, Paragon has been given that crown at McKesson. It?s an interesting parallel. How would you compare the progress of those two products over the last several years?
Both are, to your point, viewed with good reason as rising stars. I think that frankly the Paragon challenge is a significant one of going up into the larger organizations, and it?s not just a scaling issue. It?s a ?feature function that addresses complexity? issue. There are certain things you can live with manually or with modest functionality in the smaller organization that just become intolerable at larger organizations. They have a challenge going up the scale.
Soarian started at the high end and has been going into the smaller and smaller hospitals.? We now have customers who have 25 beds, small organizations like that. It?s easier to move that way because you can host it and drop the cost, you can do more canned content so there?s less that they have to worry about in terms of designing order sets and things like that. I think both are stars for a good reason, with different challenges.
Can you give me an idea of how many sites are live on Soarian and how it?s doing overall?
I can get you those numbers just to make sure I get them right. I know that in December, we signed our hundredth Soarian revenue cycle contract and we have about 300 contracts.
Note: Siemens followed up with exact figures: 316 US Soarian facilities are under contract for at least clinicals or revenue management; 120 facilities are live on clinicals; 51 are live on financials.
Other than the numbers, how you would gauge the progress of Soarian?
I?m pleased. The order volume is up, and up in a very nice way. We see more and more folks coming up, more and more folks achieving Meaningful Use, etc. They?re putting it in play and getting real yield out of it.
As the product grows and encounters a variety of situations, we find areas where we need to bolster the feature function and make it stronger. That?s a part of learning. The only way that can happen is when you put it in lots of different settings and see what works and what doesn?t. We?re learning a lot, and that cycles into more feature function and a variety of things along those lines.
As you know, we have to round out ambulatory on the Soarian platform. We?ll be showing parts of that at HIMSS and engaging contracts later this fiscal year. In addition to learning and growing the core clinical and revenue cycle stuff, we?re rounding out the portfolio with ambulatory, obviously the MobileMD acquisition of last summer, further work on BI and analytics, and then engaging patients.
As we enter into this broad new era of a more accountability for care, there are things we have to grow, in addition to new modules so to speak, but also a change at the core of what you do in the revenue cycle and what you do even in the inpatient side.
So anyway, lots of progress, lots of learning along the way, with still some work to be done as we help folks get ready for what I think will be rather sizeable, dramatic, and very significant changes in the decade ahead.
Even more than when we talked last time. Epic is just killing in the market, primarily because of its ambulatory integration. Then you?ve got Allscripts, Cerner, and Meditech trying to catch up and meet that challenge. How would say Siemens stacks up against those companies, which I assume are your four biggest competitors?
We routinely do well against those guys, some more so than others. For us to win the number of wins that we want and the percent that we want,? we?ve got to get the ambulatory part in there.
All of them have different strengths. All of them have different weaknesses.? For different things, you emphasize in different situations. I?m pleased with our competitiveness, although I think it could be stronger and will become stronger when we add a bunch of stuff to the core center of products and services that we have.
When you look at those companies, Epic obviously is again strong on the ambulatory integration. Allscripts has probably the strongest CPOE component. Cerner has a broad offering and is a fairly stable publicly traded company and that may offer advantages. Meditech has a big customer base and something for the smaller hospitals that is a little bit simpler, a little bit cheaper. When you look at those companies and figure out how you?re going to play against them to win, what do you see as their weaknesses?
If you go through them, there is Epic?s technology challenge. It?s older technology, and that will increasingly be a challenge for them. That doesn?t mean that it doesn?t work, because obviously it does. But it will increasingly be difficult to get talents to work on that, because it?s true that if you?re coming out of college and you?re 22, it?s not clear that?s where you want to spend your technical profession. Increasingly, the R&D innovation will be in technology other than the core that sits at Epic. That is a challenge that won?t happen overnight, but will progressively happen to them.
I think at some point they will have a challenging transition when Judy retires or whatever. That?s always difficult for a company that is run by its founder and has been for quite a time. But who knows when will that happen? I think for the time being, it is largely the technology and at times the implementation rigidity, which can be effective, but for some folks like the customers we have, it?s just not what they had in mind.
Cerner we compete with, and we?ll be more effective with ambulatory. It is often a feature function tradeoff. It is often the workflow engine, which is a distinctive factor in making us very effective. We actually do really well against Cerner these days in competitive situations.
I think the McKesson customer base is trying to figure out what in the world is happening and where it?s going. Obviously a bunch of people are rattled by the Horizon decision and are beginning to look around. The problem with Horizon obviously is the conglomerate of acquisitions ? which makes integration really hard, maybe even impossible ? along with the ability to navigate through this.
I think when you go to Meditech, it was a terrific company, Massachusetts roots, homeboy and all that stuff, but it is late to the game on some of the physician-oriented systems. It has got a hill to climb in terms of the physician and nursing community being really enamored with what they can do. They have similar challenges with older technology that Epic faces.
They have different challenges across the board, They?re all still doing well and are worthy competitors. Depending on the situation, some customers are worried about some of those challenges, some are not. Some in those situations are receptive to our strengths and some are not. You size up both who are you competing against, but also what the customer has in mind, what they?d like to achieve, what they worry about, and what they value and what they don?t in determining how to position yourself.
It?s interesting that you mentioned both Epic and Meditech as using old technology like MUMPS and Cache?, invented at your old employer?s place and used by you there. But it?s also interesting that they have such a large scale that they bring in people with no background and train them on the programming equivalent of dead Latin languages. Is that unique to healthcare, where you can take technologies that nobody else has heard of and just keep training your own next generation of programmers?
I don?t know enough about other industries to know how unique it is or isn?t. I do think that it is a challenge. If you say, I?m going to be fundamentally an IT company and reliant on an IT core for my product, and yes, sometimes services, but at the end of the day, I?m delivering technology. To be in a position where the technology you?re using is multiple decades old ? and that doesn?t mean you can?t bring people and then train them and maybe you don?t need that many so essentially that?s not a big of a challenge. That?s hard.
That?s hard in the years ahead to really capture the gifted technologist, to capture the synergy and the innovation that surrounds and constantly moves the technology if you go forward there. So again, it may not be all that peculiar to healthcare. It may be quite peculiar to healthcare. Regardless of whether it?s unique or non-unique, I?d be careful. It certainly was with Partners when I was there, where despite the fact that we were a big IntersSystems user and a lot of the core Partners systems are based on that.
You have a couple of old products yourself in INVISION and MS4. Are you finding that those clients are interested in moving to Soarian, or are you losing clients, or are they just in a holding pattern?
All of the above. You see people who are moving and have moved. You see people who are on a holding pattern and they might be, ?I?d like to get a little further along because I?ve done a lot of customizations to my INVISION and so I want Soarian to be equivalent to that.? We see some who are waiting, because they want to get through the Meaningful Use payment period and look at the cusp between the payments and the penalties and make their move at that point. Some decide to leave us, just as we find people who don?t have our systems come to us. People will use this juncture as the time to make various decisions about what they?re going to do or not do.
Regarding the MS4 folks, we have folks on MS4 who will be on MS4 a decade from now. It?s the right thing them for them. We will continue to support that. We also have some folks in MS4 who are saying, ?I?d like to move in to the Soarian realm? and it?s the right time for them, and so we see movement along those lines, too. We?ve been in conversations with both MS4 and INVISION clients and said, ?Let?s talk about what you?d like to do and where you?d like to go? and we?ll see some folks who are on both products for the foreseeable future and folks who decide to move more along to Soarian.
Anyway, it can be they stay for different reasons. One, because they like it, one because they want to use their Meaningful Use check, one for product maturity. They move for a different reasons ? to capitalize on Soarian feature function, etc.. You and I could be talking a decade from now and we?ll still see MS4 customers and still see INVISION customers and we?ll still take good care of them, although I think a number of them will have moved on to Soarian by that time.
Siemens doesn?t make all that many acquisitions. What?s the plan for MobileMD?
I think you?ve got to have an HIE if you?re going to be in the enterprise business, because at the end of the day, most of the health systems that will form to deliver accountable care will have learned a lesson from the big IDN splurge about 15 years ago, in which they paid a lot of money and wound up with something that was just not as agile or efficient that they would have liked it to be. I think a lot of these relations will be contractual. You and I can decide to form an ACO for diabetes care, and rather than one buying the other, we contract with each other to do this side of the other, and you have one vendor and I have another.
We?ll see a lot of heterogeneity out there, because it will be the most efficient and most flexible way to put some of these accountable care arrangements together. Given that view of the world, I?d say that will be the dominant way. Less common will be the pure acquisition of hospital and physician practices. You got to have an HIE to deal with that. Even if you decide, ?I?m going to hire a bunch of doctors and buy a couple of hospitals,? there?s care outside that boundary. The HIE becomes a critical part of linking across heterogeneous sites.
The other thing that I?m pretty sure will happen is that given that, there will be an electronic health record that is built on top of the HIE. My term is an interstitial EHR. If we?ve got five providers who are working together to deliver care to some population with different kinds of systems, then there will be a need for something that sits between them that provides not only views of patients, but also does the disease registry, a lot of analytics, a lot of the customer relationship management. We?ll see a set of apps that are built on top of the HIE to become the EHR that sits between. That?s part of what we?re beginning to put together.
How do you see that open, cloud-based platform where people can develop and put value-added apps out there? Is that a whole new industry?
There?s a new industry at two levels. There will be ? and whether it?s Medicity or Amalga ? where there?s this thing that sits between and becomes a platform for other stuff. Some people will decide that the platform is what they?re, selling like a Microsoft. Related to that is this notion that you want to have your platform be very service oriented. Whatever sort of custom apps they want to put on top of this thing to deal with unique needs ? that becomes a pretty straightforward and safe thing to do. They can do that without screwing up the whole rest of the platform.
That will encourage a lot of innovation, and it will be innovation by providers who decide they?ll use some of their staff to do that. It will be innovation by people who are in the business of providing this new kind of application. In a way, it?s analogous to the iPhone and iPad, which are fundamentally ecosystems that people write apps to and leverage that ecosystem. I think we?ll see that. We have some examples of that and some of the people we compete with have examples of that, where you create an environment that allows and encourages people to do new and innovative things that leverage that core.
Allscripts and Cerner had that early on. I don?t know that Meditech has anything, and Epic kind of does if they trust you as a customer and share their secrets for using it wisely. Do you you see it as a requirement for vendors to open it up instead of sitting on their old technology and locking the door?
I think so. I think it?s because people will increasingly expect to be able to go off and to do that. I think it?s prudent to do that as a vendor, because no matter who you are, you?ve got a development pipeline and funnel and it?s not possible to do all the things your customers want.?
You?ve got to give them a way to get to it, and in a way that leverages their investment in you rather than causing them to wonder why they bothered investing in you. I think it will become an expectation. Obviously some hospitals would say, ?I don?t really want to do that. I don?t have the staff or the inclination,? but there?s enough that will.
What?s impressive to me ? I remember seeing it often at Partners ? is that you can have a really small number of people, the kind of work that a grad student could do or a fellow could do. Man, it was impressive what they could bang out and code in a month. It?s not as if you need this big IT staff to go out and do a lot of this activity here.?
I think it will become quite common. The whole industry is moving ? not just healthcare, but broadly the IT industry ? in this direction. People will learn from iPhone- iPad type of stuff to see that in fact there are parallels in some way, shape, or form. That?s a long way of saying that I think it will become a requirement and an expectation that you can do that stuff.
How has it been watching your Meaningful Use baby grow up?
Neat in a way, because to see that a series of things you talked about in the conference room in DC and in policy committees is all over the place. Any place I ever go to, there?s a conversation on Meaningful Use and how to achieve it. It has clearly had an impact, which is probably not the most insightful observation to make.
I think it?s also one of the things where you learn that fundamentally you?ve set the bar pretty high, and there were some things that were learned along the way, that if you had to, you?d go back and tune a little bit. But it clearly is moving an industry and it clearly, I think, will have an effect on improving care.
What?s not clear to me yet is if you look at the number of Meaningful Use checks cut and the amount of those, you could say geez, it?s not quite where Congress or HHS thought it would be. But I also think it?s premature to know whether it is really on track or not. We?ll know a year from now. The fact that you could get your money in 2012 versus 2011 and some people waited for a period of time. I think a lot of the people who have gotten it today were people who were close to it, and so crossing the finish line was work although it was within striking distance, whereas others had a bit more ground to cover.
So we?ll see. We?ll see, I think, about a year from now. I think it?s too early to tell whether it?s a success in the number of hospitals and physicians that moved to it. But overall, it was neat. It was work. It clearly accelerated the industry. I think it will clearly help those who deliver care using these tools be better at delivering care.
When we talked a year or so ago, I asked you to tell me how I would be able to tell if you?re doing a good job two years down the road, so this is your midterm. You said you?ll have done the job as you intended if customers are telling you that your products contribute to your success and see them as essential. How would you grade yourself and the company?
I think we?re a B heading towards an A. Obviously I?ve made a lot of trips. First year, I visited 46 customers, so I was out a lot doing that. Clearly there are some cases where that is exactly what?s happening in a multi-faceted way. There are other cases where we need to give them additional help for that to occur, whether it?s training or implementation or a feature function.?
It?s not a clean sweep. Some are superb. Some need additional along the way. That?s helped me to understand where we need to put emphasis on products and where we need to put emphasis on services. But back to one of your earlier questions, we?re getting better all the time. I suspect that if we chat this time next year, I?m hoping that I?m giving you an A to an A-minus in that regard.
That was my last question, so I?ll leave it to you for any concluding thoughts, startling predictions, amusing observations, or whatever else you have. This is your time to shine.
I think we?re in for an amazing decade with an amazing amount of change. I think it?s going to be really hard. You probably hear it and you know this already.
Organizations going through ICD-10, and Meaningful Use ? let alone the organizational challenges and strategies ? that won?t go away. That?s just going to be part of our fabric for the next multiple years. It will be a challenging decade.
I hope that the country is better off when this is all done, that care is better, safer, more efficient, and all that kind of stuff. I do think it?s going to collectively take all of our effort and hard work to make that occur. We?re getting into the early stages of a time that will alter in material ways the structure, fabric, and practice of healthcare in this country. It?ll be cool to be in the middle of it, but it also puts a certain amount of responsibility on all of us to do it right and to do it well.
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