Shareholders Take Notice That Patients Used As Unconsented Guinea Pigs, Physicians as Bank by Health IT Vendors

At my Jan. 2009 post "Waste Feared in Digitizing Patient Records: Wall Street Journal" and others I have written about the illegitimacy of the abuse of patient rights, as well as abuse of clinician trust committed by health IT vendors using patient care settings as an unconsented software development laboratory and beta testing site. I wrote:

The IT industry uses hospitals, doctor offices and patients as alpha and beta test sites and subjects, unregulated by the FDA or other agency. When HIT fails, there is no central agency to report the failures to, only the vendor. Fixes go into a "queue" for remediation, with priority level decided by the vendor.

Clinicians are also used by HIT vendors as a form of bank and insurance company. HIT vendors depend on (free!) physician and nurse ingenuity in finding workarounds to the ill-conceived design and user experience (link to my eight part series on this issue) that their products usually present so that their products can even be salable. This, of course, taxes and tires clinicians at the expense of patients and hampers and complicates EHR diffusion. Clinicians become, in effect, unpaid development consultants to HIT companies (or, perhaps more accurately, since EHR's do become essential to medical practice, indentured servants to the HIT vendors).

Also, under the unethical, Joint Commission-violating and executive fiduciary responsibility-violating "Hold Harmless" and "Defects Nondisclosure" HIT contracting clauses, clinicians pay the price for bad patient outcomes, even if the causative factor was HIT errors. (See Health IT Hold Harmless and Defects Gag Clauses: Have Hospital Executives Violated Their Fiduciary Responsibilities By Signing Such Contracts?, and my July 22, 2009 JAMA letter to the editor on this issue.) Thus, clinicians become an insurance company, bank and risk safety net (a term that might not be inappropriate is "suckers") for the HIT vendors. This is not an optimal way to treat one's ultimate customers.

HIT is a mess, but that doesn't stop HIT vendors from simply lying about their financial status and future projected business to the investor community.

Now, HIT company shareholders are taking note of these industry (mal)practices. These (mal)practices are hitting shareholders where it really hurts - in the pocketbook. My comments in [red italics]:

Allscripts shareholders file class action suit
Healthcare IT News
August 05, 2009 | Bernie Monegain, Editor

CHICAGO – Allscripts shareholders have filed a lawsuit alleging the company broke federal securities laws when it went live with the newest version of its EHR clinical software, Touchworks [i.e., a "version" that had not been thoroughly tested and validated outside hospital walls, a practice HIT vendors get away with due to the near spinelessness of regulators such as the Joint Commission, FDA, and others - ed.] .

Allscripts officers say the suit is without merit.

[As I pointed out at "Do Healthcare Organizations Truly Want Electronic Health Records To Succeed?" regarding the lawsuit my own organization filed against this company and its partner Medicomp Systems (civil complaint PDF here), where incomplete, untested and non-functional software was sold by this company for use by our physicians, I'd say the allegations do deserve further investigation - ed.]

"We are aware of the lawsuit and have reviewed the complaint," Allscripts officials said Wednesday. "While it is our policy not to comment on the substance of pending litigation, we believe the lawsuit is without merit and will vigorously defend the allegations."

The lawsuit, which seeks class action status, has been filed in the United States District Court for the Northern District of Illinois on behalf of those who purchased the common stock of Allscripts-Misys Healthcare Solutions, Inc. (formerly known as Allscripts Healthcare Solutions, Inc.) between May 8, 2007 and Feb. 13, 2008. It names Allscripts-Misys Healthcare Solutions, CEO Glen Tullman and Chief Financial Officer William J. Davis as defendants.

At a user conference in Orlando, Fla., July 30-31, Allscripts CEO Glen Tullman told some of the attendees that Allscripts might have rushed version 11 of Touchworks to market too quickly.

["Might have" rushed it out too quickly? It had, in fact, been delayed several months according to the lawsuit. "Perhaps" the delays needed to be lengthier. In other words, f*** the doctors and patients, we're getting this cr** out the door so as to not further injure our profits with further delays - ed.]

He said the company was caught off guard by providers who found new uses for the product.

["New uses?" (We all know that when companies sell broken HIT, it's always the doctors' fault) ... Likely translation: clinicians tried to practice medicine the way they saw best, not the way the Allscripts software designers saw best or "approved of." (Arrogance, anyone?) The clinician users tried to use the software in a real-world setting while applying the improvisations needed for proper patient care in a poorly bounded, uncertain environment (per Nemeth and Cook) and found the software's support of the uncertainties and realities of the clinical environment, and likely the software's stability itself, poor - ed.]

Tullman and Faisal Mushtaq, the company's senior vice president of product development, said Allscripts has invested roughly $14 million to improve stability and performance [after throwing the doctor and patient test subjects to the wolves after a "might have rushed it out" premature rollout - ed.], and they expect the next version, to be rolled out soon, to work more smoothly.

[I really despise the "version 1.1 will be much better" in healthcare settings, as it goes back to the issue of sick patients as unconsenting subjects in a software testing lab, and physicians as a bank and insurance company for the vendors when things go wrong -ed.]

The complaint alleges that defendants failed to disclose the following adverse facts:

* Allscripts lacked the necessary resources [i.e., smart, a.k.a expensive, people who actually know what they're doing thanks to the appropriate informatics education and expertise. Were the ones they did have tied up in patchwork remediation and crisis management? - ed.] to install V-11 software at customer sites; Allscripts had no historical basis to estimate the completion of V-11 or the impact V-11 sales might have on the company's 2007 revenues and earnings [if they made stuff up, that would not be too uncommon in today's financial environment. Also, the "lack of necessary resources", not unique to Allscripts, portends quite poorly for the planned, manic rush to national EHR by the cavalierly short deadline of 2014 - ed.]

* The complexity of V-11 had materially and adversely lengthened the sales cycle and revenue recognition cycle for the company's V-11 sales contracts [Another instantiation of my belief that business IT sales practices are inappropriate for clinical IT, where there are unconsenting "customers" with special rights - patients. One also wonders: did clinicians balk at a Rube Goldberg contraption but hospital executives purchase it anyway? - ed.];

* Allscripts was currently experiencing adverse and continuing delays in the installation of V-11 software systems [which were perhaps not revealed by clients, thanks to secrecy clauses regarding defects and problems as noted by Penn's Koppel and Kreda in JAMA? - ed];

* Based on the foregoing, defendants had no reasonable basis for their statements concerning Allscripts' current and future financial performance and projections.

The law firm of Izard Nobel LLP, based in West Hartford, Conn. announced the class action lawsuit on Wednesday.

Click here to read the complaint: http://www.izardnobel.com/allscriptsmisyshealthcare/ .

The PDF of this class action complaint is here.

So, it seems entirely possible the defects nondisclosure clauses promulgated by these vendors, and accepted by meek hospital executives and CIO's, may have supported and/or led to a situation of shareholder fraud.

It would be ironic indeed if these cavalier HIT practices end, and the HIT vendors began to adhere to principles of responsibility and resilience engineering, not due to regulatory pressures but due to shareholder lawsuits.

Finally, Allscripts CEO Tullman was a campaign adviser to the President on healthcare. It's perhaps due to advisers like this that national plans for healthcare reform are sinking like the Titanic. As per my Feb. 18, 2009 Wall Street Journal letter:

... it is the government that has been deceived [rather than the public] by the HIT industry and its pundits. Stated directly, the administration is deluded about the true difficulty of making large-scale health IT work. The beneficiaries will largely be the IT industry and IT management consultants ... The government has bought the IT magic bullet exuberance hook, line and sinker.

-- SS

addendum:

Perhaps I should self-turn in this post as "fishy" to the healthcare reform snitch line at "flag@whitehouse.gov"?