John Moore

April 28, 2011

Managing PartnerChilmark Research

HIE Market Trends:Where We Are TodayWhat We’ll See

Tomorrow

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• Founded in 2007

• Based in Cambridge, MA

• Chilmark’s Sole Focus is Healthcare IT

• Current Research Areas Include:

• Cloud Computing, Connected Health (biometrics, Clouds, & HIS), Health Information Exchanges (HIEs), mHealth, Platform as a Service (PaaS), Analytics/BI in Healthcare, Patient Engagement Strategies

• Services Offered:• Market Research - Adoption & Technology Trends

• Self-sponsored and client sponsored reports

• Strategic Advice• Market landscape, trends, vendor viability, business plan development,

go-to-market strategies

About Chilmark Research

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• Billions in Federal Funding• EHR Incentives• Establish State HIEs• Beacon Program & Others

• Healthcare Reform• Bundled Payment Models

(ACO)• Shared risk/reward• Manage transitions in care

• Business Alignment• Align Affiliates to Mothership

Significant, Unprecedented Money Flowing Into Market

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Attribute Public Enterprise Observations

Messaging & Results Dist. XXX XXX Critical to both entities (incld. results, clinical

notes, meds, alerts, etc.)

Eligibility XXX XXX Simplify & automate process to lower costs

eRx XXX XX Less of concern for enterprise as incentives target single physician

Disease/Care Mgmt XX XXX New payment models (ACO) driving importance

for enterprise

Orders Mgmt X XXX Hospitals/IDNs look to have lab orders placed with them

Referrals Mgmt X XXX Hospitals/IDNs see referrals as key part of retention

EHR XXX XX Public look to engage all, enterprise, just those in IDN

PHR XX XX Low interest today, but will change with Stage 2 MU and future ACO rules

Analytics X XXX Increasing importance for reporting under new payment models

Public Health XXX XX Track community/regional health initiatives, MU requirements will push enterprise HIEs to adopt

Two Distinct Markets: Public & Enterprise

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• HIMSS’11 Lists 189 HIE Vendors• Service Providers• EHR Vendors• PACS Vendors• Tools Vendors• ISPs• Etc.• Core HIE Vendors

Multitude of Vendors Claiming They Have the HIE Solution for You

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• Target: Existing Clients

• Walled Garden• Some Exceptions

• Examples:• Allscripts, Cerner, eCW,

Epic, GE, McKesson, NextGen

• Prognosis: • Limited Traction for

Closed Systems• Others Must Prove

Openness

EHR Vendors

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• Target: Public & Enterprise• Slight Edge to Pubic

• Focus on Services• Software Secondary

• Partner or Acquire

• Play on Customization

• Large Firms Dominate• ACS, AT&T, Dell, Harris,

IBM/PWC, Verizon, etc.

• Prognosis:• Success in Large, Complex

Environments

Service Firms

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• Target: All Markets• Partner for Large HIEs

• Focus on Software• Services Secondary

• Dominated by Small Firms• Rapidly Consolidating

• Prognosis:• Large Firms Dominate in

18-24 Months• Resources to invest

Core HIE Vendors

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Looking Ahead: Top Three Trends in HIE

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• HIEs Move to Higher Order Functions• Beyond Moving

Information• Deliver Services

• Data=>Analytics=>Intelligence• Reporting• Attestation• Operations• Decision Support…

1) Information Exchange Becomes Commodity

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• HIE Moves to Utility, PaaS Model• Open API Layer• May have SDK• Apps are interchangeable

2) HIEs Become App Platform

H1H1 Ph1Ph1 Ph2Ph2 H2H2

L1L1L2L2

Im1Im1 Im2Im2

Pa1Pa1Pa2Pa2

Rx1Rx1 Rx2Rx2

Utility (PaaS HIE)Utility (PaaS HIE)

Database Layer(labs, images, clinical notes, etc)

Messaging

API Layer (SDK?)

EM

R-1

CD

S-1

CD

S-2

PH

R-2

Ap

p

Ap

p

Qu

ality

Rp

t’n

g

Imag

eV

iew

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EM

R-2

PH

R-1

HIE Vendors Must Partner Aggressively to Keep Pace with Client Needs

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• Enterprise Market will Lead• Innovation• Adoption• Growth/Size

• Public Market will Follow• Lightweight• Network of Networks

3) Two Markets, One Leads, One Follows

In Near-term, Tension & Struggle Between These Two Markets

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• Two Distinct Markets• Different Strategies

• Little Overlap in Operational Structure• Some Overlap in Needs

• No Dominant Vendors• Rapid Consolidation to Select Few

• Most EHR Vendors are Out

• Migration to Services• Exchanges Move Beyond Exchange• Analytics the “Next Big Thing”

• Payers Stepping Up to the Plate

Take-Aways

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“We are only as good as the information we have delivered at point of decision.”

- Dr. David BlumenthalDirector ONC, April 2010