Siemens Medical: Invasive Surgery

 
 
By Baselinemag  |  Posted 2004-08-01
 
 
 
When it rumbled into the health-care information technology market four years ago, Siemens Medical Solutions promised to redefine the way hospitals create and use information. But the diagnosis of the German giant's efforts so far has been mixed.

The company's Soarian medical information system does everything from storing electronic patient records to processing bills. The software is supposed to do for hospitals what enterprise resource planning programs have done for manufacturers: deliver the right data to the right people at every step in the patient-care process to make service delivery as efficient as possible, while reducing errors by replacing paper trails with digital documentation.

"Health care has a whole lot of 'hurry up and wait,'" says Richard Eshbach, CIO of Mountain States Health Alliance. "Soarian will give us a way to push the care process along in an appropriate, timely matter and avoid delays."



Soarian arose out of Siemens' $2.1 billion acquisition in 2000 of Shared Medical Systems (SMS), a Malvern, Pa.-based company founded in 1969 by three ex-IBM mainframe salesmen. The deal was a big push for Siemens into the U.S.: SMS had 1,000 customers, including Cincinnati Children's Hospital Medical Center.

Siemens, though, was eager to grab more. The Germans immediately installed their own managers to crack the whip at SMS, whose corporate culture had grown stodgy over the years, according to some customers. SMS' last major product rollout was in 1989 with Invision, a medical information system whose core pieces run only on IBM OS/390 mainframes. Siemens pushed to develop an entirely rewritten information-management system, and the company announced details of Soarian about a year and a half after it bought SMS.

But Soarian has been hurt by delays—some of its software modules have been about a year behind schedule. That's partly because Siemens delivered some shoddy code early in the beta-testing cycle, according to Greg Walton, CIO of Carilion Health System. "They would get stuff from Bangalore, they would ship it to Germany, and then they'd ship it to us," he says. "Then we'd say, 'It doesn't work.'" Walton says Siemens is still trying to get a handle on the information-technology business. But, he adds, "I think they're smart enough to figure it out."

Janet Dillione, senior vice president of Siemens Medical's U.S. information-technology group, acknowledges some stumbles out of the gate for Soarian. "We're now being more proactive," she says. Dillione originally said Siemens Medical would provide Baseline metrics showing a decline in bugs reported by Soarian customers; later, however, the company said it was unable to release this data.

In any event, customers say rolling out Soarian is a massively complex undertaking. The full suite of Soarian financial and clinical systems requires a hospital to change almost every one of its business processes, from registering and treating patients to billing them. "We've been able to build our data repository pretty quickly, but we had to do it from scratch," says Mary Buckley, vice president of information technology at Chester County Hospital, an early adopter of Soarian.

That complexity, combined with Soarian's delays, caused at least one customer to give up on it. Baptist Health System, based in Birmingham, Ala., pulled the plug on its Soarian project in April because of "the substantial investment, resource and time commitment required to participate as a Soarian early adopter," the health system said in a statement. Dillione says Siemens Medical and BHS arrived at a "mutual decision" to cancel the project given the customer's priorities.

The episode reflects the deeply conservative bent of technology managers in health care. Indeed, even one of Siemens Medical's own employees admits he isn't ready to give Soarian the green light.

Dave Niven holds the title of CIO at Chesapeake Health, a company that operates a 310-bed hospital in Chesapeake, Va. But he's actually a Siemens employee: In 2001, Chesapeake Health set up an outsourcing agreement with Siemens for its entire 25-person information-technology staff. Today, Chesapeake Health runs a hosted version of Invision. While Niven is keeping an eye on Soarian, he says the hospital does not expect to implement it for at least two more years. "The strategy we have here is to be a fast-follower, not in the lead," he says.

Until Soarian has been completely battle-tested, Siemens Medical hopes most of its customers have the same philosophy. But it doesn't have much more time to get it right, says Dr. Barry R. Hieb, a research director at Gartner. "This is the year that's going to make or break Siemens," he says. "If they say, 'You have to wait another year,' their installed base is going to start to erode."

The Company

Headquarters: 51 Valley Stream Pkwy., Malvern, PA 19355

Phone: (610) 448-4500

Ticker: Division of Siemens (NYSE: SI)

URL: www.medical.siemens.com

Employees: 31,000

Founded: 1877

Business: Provides medical devices, health-care information systems and related consulting services in 120 countries.

Executives: Erich R. Reinhardt, president and chief executive officer; Tom Miller, president of information-technology division.

Products: Soarian is Windows software that provides patient-care workflow, physician order entry, resource scheduling, billing and other features; Invision is an older, mainframe-based system for financial and clinical data processing. The company also remotely hosts applications and data for 1,000 customers.

Market Share: 6% of the $15.1 billion U.S. market for health-care software, hardware and services, 2002 (IDC).

Competitors: Cerner; Eclipsys; Epic Systems; GE Healthcare; IDX Systems; McKesson; Misys Healthcare Systems.

Milestones

  • 2000: Buys Shared Medical Systems (SMS).
  • 2001: Announces Soarian, a system to succeed SMS's Invision.
  • 2002: Relocates U.S. headquarters from Iselin, N.J., to Malvern, Pa.
  • 2004: Sells 90 support contracts to business software vendor Lawson Software for $24 million.
Reference Checks

Mountain States Health Alliance
Richard Eshbach
CIO
(423) 431-1662
Project: Tennessee health-care provider has used Invision since 1993. In December 2003, MSHA signed a five-year, $38 million contract with Siemens for Soarian.

Chester County Hospital
Mary Buckley
VP, I.T.
(610) 431-5000
Project: The 250-bed community hospital in West Chester, Pa., with 1,500 employees has implemented Soarian clinical applications for documenting patient care.

PinnacleHealth System
Rich Bagby
VP of Informatics, CIO
rbagby@pinnaclehealth.org
Project: Health-care system in Harrisburg, Pa., outsources its 60-person I.T. staff to Siemens; it began migrating from Invision to Soarian in July.

Carilion Health System
Greg Walton
CIO
(540) 224-1510
Project: Eight-hospital provider in southwest Virginia is replacing Invision with Soarian, which Carilion has put into production at one of its hospitals with 350 users.

South Carolina Heart Center
Sherry Shults
Dir., Clinical Support
(803) 255-2645
Project: Heart-disease treatment provider in Columbia, S.C., uses Soarian Cardiology to produce instant procedure reports in its diagnostic cardiac catheterization lab.

Susquehanna Health System
Pamela Wirth
VP, CIO
pamela.wirth@shscares.org
Project: Three-hospital system in Williamsport, Pa., uses Soarian financial, patient management and clinical software for 260,000 patient records.