Who Should Microsoft Acquire in Health IT? Who Is InnovateHealth? A Blog Sampler

4/7/10Follow @gthuang

With this week’s opening of our national Health IT news channel, we’ve been ramping up our coverage of all things healthcare, medical computing, and electronic health records. So a couple of Seattle-related items caught my eye this week.

—First, the Texas-based online resource site Software Advice, which profiles electronic health record software (among other things), has a provocative piece about Microsoft written by vice president Austin Merritt. For about three years, Merritt has been advising medical software buyers on which systems to look at. He argues that Microsoft needs to acquire a big player in electronic health records to really compete in the medical market.

Merritt writes that Microsoft’s recent efforts such as Amalga and HealthVault (which we’ve reported on here, here, and here) “are on the periphery of the market and do not really target the sweet spot: electronic health records [EHR] for physician practices.”

Microsoft would probably disagree, but Merritt says HealthVault is “designed to be a reference point for consumers, not a substitute for medical records. If Microsoft were able to introduce an EHR to the market and enable its users to make records accessible to patients, labs, specialists and pharmacies via HealthVault, then they would really be on to something.”

Merritt goes on to evaluate in detail what he thinks are the top 10 candidates for the next Microsoft healthcare acquisition—NextGen, GreenWay, Pulse, Aprima, AllScripts, eClinicalWorks, Eclipsys, Athena, Epic, and Cerner—in terms of their market share, sales channel, software architecture, and how scalable their products are. It’s an interesting read. (We’ve written about Microsoft’s recent acquisition of Boston-area-based Sentillion and what it means for its Health Solutions Group strategy.)

—In other news, I’ve recently connected with the folks behind innovateHealth, a group of leaders in healthcare technology and services who are raising the profile of health-IT companies in the Northwest. The group was founded by venture capitalist Rob Coppedge of Faultline Ventures, Peter Gelpi of Clarity Health Services (former Aldus and Adobe veteran), and Tobin Arthur of physician network iMedExchange, all based in Seattle.

Last May, innovateHealth organized a summit to address the challenges in financing innovation in health-IT. Many prominent investors, financiers, entrepreneurs, and CEOs attended, and my main takeaway from the event transcript is that there was a lot of caution—smart caution—in the room. That might just be easing up a little now, but there is still a lot of aversion to risk in this emerging sector.

According to Coppedge, the top-of-mind issues right now are cost containment (we can’t just keep spending on healthcare while adding more people to the system), and the shifting of risk (and costs) from providers to patients. Although things are messy and difficult, that also means there are tons of opportunities for smart entrepreneurs and investors. “There’s been no more exciting time to be investing or starting a business in this space,” Coppedge says.

We hope to have more on this soon. Meantime, we at Xconomy Seattle are gearing up for our Health IT event on May 12, which you can read about here.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • William Gerald

    Perhaps Microsoft should take a look at Health Grades(HGRD)which appears to have a great future and little real competition in this particular health care niche.

    Just Plain Bill