June 11, 2007

Microsoft’s Growing Interest in HIT: What’s It Mean?
By Elizabeth S. Roop
For The Record
Vol. 19 No. 12 P. 20

As the technology giant prepares to spread its roots in healthcare, some are questioning how it can be a competitor and a partner at the same time.

With several key acquisitions, the release of the Connected Health Framework Architecture and Design Blueprint, and the launch of its Health Connection Engine, Microsoft burst onto the HIT scene in a big way during the past year.

The combination of offerings to address enterprise integration and interoperability challenges and the recent addition of a specialized search engine to deliver health information to consumers has some confused over the direction of Microsoft’s late entry into the industry. The company, however, says it is all part of a carefully constructed strategy that has been quietly taking shape for several years.

“Microsoft has had a growing presence, a growing investment in the health information technology space. Quietly but very steadily and, actually, very aggressively, we’ve been increasing and ramping up our resources,” says Steve Shihadeh, general manager of Microsoft’s Health Solutions Group. “We have a history of careful, prudent, patient investing. The healthcare business is littered with lots of mistakes, so we’re going slow so that we can go fast. We are taking a very solid approach.”

Some, however, point to the lack of innovation coming from Microsoft’s HIT efforts and the deviation from its traditional role as the technology behind the applications as the basis for questions about what the company is bringing to the party.

“My observation is that right now, Microsoft’s approach to healthcare is confusing and will inevitably remain confusing,” says Barry R. Hieb, MD, a research director with Gartner, who specializes in the computer-based patient record market. “The reason is that they have a major issue with what I call ‘coopetition.’ They need to remain a good partner with their healthcare clients, yet each application that they develop themselves makes Microsoft a competitor as well. Microsoft, as a global company, exists in their words to ‘manage the plumbing.’ They are the operating system; they are the database for many people. They are the stuff underneath all these applications. That means that if they do their job perfectly, they are invisible to the client because plumbing that works right is something you don’t think about.

“Microsoft has a lot of smart people, but there are a lot of bright people all over healthcare inside each of the major healthcare vendors,” Hieb adds. “We have watched these companies struggle to come up with innovative ideas. We don’t think that Microsoft has the resources to out-innovate these companies. Instead, what they can do is acquire innovation from small companies.”

Wading Into the Fray
Recently, Microsoft’s HIT focus may have attracted significant attention, but the company has been quietly active in the industry for years, says Shihadeh. Microsoft products can be found in healthcare organizations worldwide, and the company has approximately 300 healthcare partners, including integrators and hardware and software manufacturers. The company has also significantly invested in health research and development and has added specific healthcare-related features into its horizontal product platform.

Also reflecting the company’s dedication to the HIT space is the growth in employees dedicated to healthcare. In 2000, that number was just five. Today, however, more than 600 individuals, including physicians and other experts, focus on healthcare.

In mid-2006, Microsoft went public with its intentions to capture a portion of the HIT enterprise space, announcing the formation of its Health Solutions Group and acquiring Azyxxi, a health intelligence engine that brings together all types of patient data from hundreds of sources and makes them instantly available at the point of care.

Designed by physicians, Azyxxi was first deployed in 1996 in the emergency department of Washington Hospital Center, a MedStar Health facility in Washington, D.C. The software serves as a repository for all of a patient’s routine clinical information. It then provides users with a comprehensive view of each patient, including electrocardiograms, scanned documents, x-rays, MRIs, positron emission tomography scans, etc.

Azyxxi fit well with Microsoft’s strategy of acquiring innovative technologies then working with early adopters to help nurture the product along the path toward commercialization. Since the acquisition, contracts have been signed with NewYork-Presbyterian and Johns Hopkins. (Both are in the process of implementing the product.)

“It’s the best of both worlds,” says Shihadeh. “It’s not just on the white board. [Azyxxi] is running, and clinicians across the system are using it every day.

“Microsoft has a strong, growing presence in the enterprise space. Quietly, our products such as SQL Server, Windows Server, and a whole array of products that not everyone has heard of are helping enterprises run their businesses,” he adds. “So Microsoft has a growing presence, and we think Azyxxi is the perfect complement to that. It lets us leverage relationships and connections to solve some really big problems they may have.”

Azyxxi also provides a glimpse into the Microsoft model for integrating the enterprise. Unlike the federated model, in which information stays in separate databases and is accessed via bridges and interfaces, Microsoft’s model is built on the centralized database.

The centralized model, says Shihadeh, allows for a more immediate response and doesn’t require users to orient themselves to multiple systems. It is also better suited for advances in technology and a changing business environment.

“Ultimately, the technology changes, the lowering costs of storage, the capabilities and power of organizing data in what we call a meta data format make ours a winning approach,” he says. “[Healthcare organizations] see the need for having all the data just a couple of clicks away with lightning-fast response times. A federated model doesn’t solve that same set of issues. A federated model is a way to perhaps get organizations linked but not really connected. … I think it is reasonable to look at Azyxxi as solving the interoperability problems of an individual integrated delivery network.”

Also in 2006, Microsoft released its Connected Health Framework Architecture and Design Blueprint, a free architectural foundation that it positions as a real-world model for deployment of service-oriented architecture (SOA) solutions to address integration and interoperability issues within healthcare organizations. The Blueprint offers vendor-neutral guidance to help organizations address issues such as service delivery capabilities, capacity, and reliability. It provides generic and scenario-specific recommendations illustrating how to design, develop, deploy, and operate an architecturally sound application portfolio and interoperability infrastructure in a healthcare environment.

The Blueprint was developed with input from customers and partners and can be used by healthcare organizations either independently or in conjunction with Microsoft partners. It is the first offering from the company in what will be a series of guidance documents and tool sets for the provider community.

“Our customers around the world asked Microsoft to put a stake in the ground so that they might use that guidance to make decisions about what products fit well within their world,” says Shihadeh, adding that the document has been downloaded more than 70,000 times since it was made widely available in February.

Along with the Blueprint, Microsoft is making available the Health Connection Engine, which was described in a statement as “a standards-based set of Web services that enable health organizations to quickly deploy solutions to improve interoperability, clinical collaboration, and decision-making tools.”

Shortly after the release of the Blueprint, Microsoft announced its acquisition of Medstory, a specialized search engine that delivers targeted health information to consumers. For Microsoft, the acquisition represented a strategic move into the consumer health search arena and signals a long-term commitment toward the development of a broader consumer health strategy, just as Azyxxi did in the enterprise space.

“We see health relevance, health vertical search, as a critical part of our strategy to begin a conversation with the consumer about his or her health issues,” says Shihadeh. “For us, we see it as a very natural fit, one that will fit part of our broader health consumer strategy, which is evolving, and you’ll be hearing more from us as time goes by. So you should look at Microsoft as coming at the healthcare opportunity from the enterprise space with Azyxxi and the consumer space with Medstory.com.”

Revisiting Familiar Territory
Microsoft’s interest in committing resources to identifying solutions to the most perplexing HIT challenges is welcome, even if the innovations seen thus far are limited to the technologies coming out of the acquired companies.

“I think it’s great that a company like Microsoft is devoting significant resources to the healthcare space,” says Bill Bernstein, chair of Manatt, Phelps & Phillips LLP healthcare division. “They’ve made some significant acquisitions and appear to be developing a robust solution. The key issues will be what they are for all companies in this space: privacy, security, patient identification, and providing an ability to communicate across systems. These issues are not simple to solve, and addressing them will be the key to developing a market-worthy product.”

It makes sense for Microsoft to build on the success it’s already enjoyed in the healthcare industry with its BizTalk Server and the BizTalk Accelerator for HL7 (Health Level Seven), both of which are widely used in healthcare, according to Will Weider, chief information officer of Ministry Health Care and Affinity Health System, who also blogs at candidcio.com.

And while others have also embraced SOA as the foundation for interoperability and taken the connective rather than application-based approach to HIT, the entry of Microsoft into the fray is “encouraging in that it will continue to light a fire in the healthcare information technology industry. People will see it as either an opportunity or a challenge, so we’ll continue to see standards mature at a faster pace,” Weider says.

That said, Weider is not convinced that even the power of Microsoft will find a truly feasible solution to the integration and interoperability challenges faced by healthcare enterprises in the near future.

“I know what the challenges are in trying to get systems to talk to each other. I have 15 hospitals, most of them on their own computer systems. Even sharing internally is an unbelievable challenge,” he says. “If there was some sort of magic architecture box that I could put in the middle of that and make it happen, I would do it. But I know that: a) there isn’t one today and there won’t be anytime soon, and b) even when there are standards in place, the mapping work still falls on our shoulders, and it is an unbelievable amount of work. So, even when these frameworks mature, the work is just beginning.”

Shihadeh says Microsoft embraces the challenge and is convinced that Azyxxi is the solution. That is why it is dedicating resources to improve the technology that has already realized success on a small scale rather than investing heavily into the development of new offerings.

“We have taken a careful look at all the code to make it more efficient and more secure,” he says. “Microsoft has really been heavily focused on efficiency and security around our whole trustworthy computing initiative. Sometime this summer, we will release the first version [of Azyxxi] from Microsoft. So no, there are no new applications per se, but we are getting the product ready for general commercial use.”

Succeeding where others have faltered and even failed may not be Microsoft’s greatest obstacle to making an impact in HIT. By moving beyond the role of “plumbing” and into the forefront with client-facing applications, the company may well be turning its partners into competitors.

Once the focus shifts from resolving the interoperability dilemma, with guidance and tools such as the Blueprint, to marketing an actual connectivity engine such as Azyxxi, partners may see Microsoft as a threat. As a result, the HIT initiative may find itself in the middle of an internal tug-of-war.

“Interoperability is much less threatening and indeed fairly positive for their partners,” says Hieb. “Interoperability is just another aspect of plumbing. Microsoft can say that this is something they will push. What they can’t push is interoperability and Azyxxi. They can’t push specific products that compete with their partners,” adding that Medstory presents the same dilemma.

“They have all sorts of partners that do comparable functions, so they are darned if they do and they are darned if they don’t,” he continues. “What this means is that Microsoft will, in perpetuity, be locked into a conflicted situation where it knows it’s got to get beyond being just the plumber, but it can’t figure out how to do that.”

Microsoft, however, believes there is more than enough room for another player in the industry, and their partners will be key to the success of any HIT initiative.

“Within the field of healthcare IT there is a lot of room for improvement, and it won’t be a one-company or one-approach solution,” says Shihadeh. “Microsoft is totally committed to having a rich partner ecosystem. As we develop new products and solutions, we will continue to work with our partners to evaluate joint opportunities and the best path for moving forward.”

— Elizabeth S. Roop is a Tampa, Fla.-based freelance writer specializing in healthcare and HIT.