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Joint EMR project targets practices nationwide

GE Healthcare and Intermountain Health Care are developing a clinical information system that GE will sell to other hospitals.

By Tyler Chin — Posted March 14, 2005

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Intermountain Health Care, one of the earliest users of electronic medical records, and GE Healthcare have signed a letter of intent under which they will jointly develop a clinical information system that the latter will market to hospitals and large group practices nationwide.

Although the yet-to-be developed product is intended for large health care organizations, it also will play a role in GE Healthcare's marketing of its Centricity Physician Office EMR software for ambulatory practices, said Don Woodlock, general manager of inpatient clinical at GE Healthcare, a division of General Electric Co.

Doctors in communities where hospitals have installed GE systems will be able to easily "talk" electronically with those hospitals if they buy GE's ambulatory EMR product, formerly known as Logician. "If doctors buy other EMRs from other vendors they will be interoperable though interoperability may not be as deep [as it would be with the Centricity product line]," Woodlock said.

Under the proposed deal, expected to close this month, GE Healthcare will bear the bulk of the research and development costs associated with developing the system and Utah-based Intermountain Health Care will spend about $100 million to buy and install pharmacy, radiology and other departmental clinical systems at its 21 hospitals and 92 clinics, Woodlock said.

The starting point for the new system will be a system IHC has developed and used for the past 30 years and a system GE Healthcare has marketed to hospitals for three years, Woodlock said.

The arrangement marks an effort by GE to crack a market dominated by a handful of health care software companies, including McKesson Corp., Siemens Medical Solutions, Misys Healthcare Systems and Cerner Corp. The goal is to compete against those companies but just on the clinical information systems market, Woodlock said, explaining that GE Healthcare will not sell administrative or financial systems to hospitals.

Some observers are skeptical that GE Healthcare will succeed in wrestling market share from its entrenched competitors.

"Their strategy is flawed" and GE is making a mistake if it thinks it "can sell clinical products without a good patient accounting and patient care product," said Ron Johnson, president of RL Johnson & Associates, a Tracy, Calif., consulting firm specializing in hospital information technology systems. "If they are going to jointly develop something they are five years late. The only thing that will carry them is the name of GE."

IHC has "some expert technology," including best practices, but it "is based on data from Salt Lake City and I don't know how transportable those rules ... will be for other hospitals," Johnson said.

The participants, however, are confident the product they are developing will meet the needs of hospitals worldwide. A major reason GE is partnering with IHC is that the health system is a microcosm of the market, including rural, academic and specialty hospitals and clinics, and thus offers an ideal test bed, Woodlock said.

"We think what we got is pretty good," said Greg Poulsen, IHC's senior vice president. "In fact we took a hard look at the market six months ago to see what the state of the art was, to see if we were behind, and concluded that what we had was as good as what was available anywhere."

But having said that, IHC's view is that an EMR requires constant development and the cost "is getting more and more expensive every year as the capabilities [required] become greater as the information system reaches into more and more parts of the organization," Poulsen said.

IHC will receive royalties "but that's not [our] primary purpose," he said. "Our reason for being in this is to share development costs."

GE anticipates that the first product to be produced from its collaboration with IHC -- a medication administration system -- will be on the market in 18 to 24 months.

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