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Hype vs How-To

Gary Baldwin, Technology Editor, May 21, 2007

At first glance, the earnings report from EMR vendor Allscripts seemed fairly impressive. The Chicago-based software vendor said its first quarter profit more than tripled, rising to $4.5 million. Revenue grew 54 percent to $65 million, compared to $42 million for the same period last year. And the company--one of the exhibitors at this week's TEPR show in Dallas--had cash and marketable securities of $90 million.

"Our revenue growth, visibility to sales opportunities and solid bottom-line performance give us confidence in our ability to deliver solid results during the remainder of 2007," said Glen Tullman, Allscripts CEO in a press statement. Sounds good, right? Well, the stock market didn't think so. After it released the numbers, Allscripts' per-share price dipped 11 percent, to about $24 a share.

Reason? Analysts expected revenue to be higher. Those polled by Thomson Financial expected revenue to be $67.1 million, the AP said. In other words, Allscripts made money--just not enough money to please investors reacting to the analysts.

Now this is not a unique occurrence on Wall Street, where good news can be cause for alarm, so-so news can become bad news, and wishful thinking can turn into euphoria. On that last point, consider the healthcare dot-com companies that proliferated at the turn of the century.

Most disappeared, like DrPaula.com and DiabetesManager.com. The publicly traded ones soared--mostly on the "expert" opinions of financial analysts who developed a sudden interest in the trillion dollar healthcare economy--only to become historical footnotes. Do you remember Healtheon? During those heady days, I remember talking to one financial guru for a story about an online EMR vendor. Her company was backing the start-up, one of the earnest, but dreamy dot-coms crowding the healthcare space.

There was so much investment capital pouring into the market it made everyone's head--and judgment--spin. The start-up went bankrupt within a few years. Now, in contrast to the dot-coms with dubious business plans, a small company like Allscripts almost seems like a blue-chip. It actually makes money! This is no small accomplishment for an EMR vendor, given the fact that so few physician practices have automated their operations. It's a tough market to crack. Many physicians, no doubt, view clinical IT with skepticism, as it has been so oversold by so many companies.

Tullman, however, has a way of bringing clinical IT down to earth. He demonstrated that during our face-to-face interview at the company's Merchandise Mart suite here in Chicago last fall. Allscripts has published a 220-page manual, "The Electronic Physician: Guidelines for Implementing a Paperless Practice." It lays out a cohesive, step-by-step game plan for EMR adoption. Instead of saying "here's why you need our company," the book says, in essence, "here's why you need an EMR."

For Tullman, automation can boost healthcare business efficiency and clinical quality. At the Merchandise Mart, he touched on these points during a training session with some of the group practices that recently bought the firm's software.

He also tempered his enthusiasm with a dose of reality. He told the group practice managers and physicians that converting to an EMR is a daunting task. "We don't get it right all the time," he said.

Regardless of how it plays on Wall Street, that kind of candor does resonate with clinicians.


Gary Baldwin is technology editor of HealthLeaders magazine. He can be reached at gbaldwin@healthleadersmedia.com.

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