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Health IT Firms Are Running Afoul of Regulators Lately

May 6, 2019

The stories last week of uBiome, a startup that invited an FBI raid for fraudulent billing practices, and Surescripts, a dominant player in the e-prescription market that has been accused by FTC of anti-competitive practices, are the latest in a string of companies choosing to put sales growth ahead of compliance and patient safety.

This past week, industry leader Cognizant announced results for Q1, missing revenue estimates and lowering the forecasts for the year. The company also separately announced layoffs to cut costs. Growth in the healthcare segment, which contributes nearly a third of the company’s revenues, was hurt by continuing industry consolidation.

For an in-depth understanding of the overall performance of major global IT services firms in the healthcare business, download our annual WITCH report.

Starting this month, we are launching a new monthly newsletter, The WITCH Monthly Monitor, that tracks major global IT services firms in healthcare. This complimentary newsletter will be a comprehensive reference resource for those who track consulting firms in healthcare. Feel free to forward the link to your colleagues and ask them to subscribe to stay in the know.

Technology vendors have long invested in “managing” their company’s rankings with analyst groups such as KLAS and Gartner. This piece hints at what many industry insiders have long known about how CIO’s really make decisions.

Highlights for the week

Cognizant Misses on Q1 Earnings, Cuts 2019 Guidance
HLS revenue declined by 3.2% from the preceding quarter owing to “industry consolidation and increased movement of work to a captive at a large North American client.”

Insiders describe aggressive growth tactics at uBiome, the health start-up raided by the FBI last week
There’s a common thread across startups that fall prey to the temptations of unethical practices to drive growth.

Silicon Valley’s health-tech start-ups need to stop getting in so much trouble
More and more Silicon Valley health IT startups are getting into trouble for getting ahead of themselves.

HHS to cap HIPAA fines based on ‘culpability’
Caps on liabilities for HIPAA violations should ease risk and financial burdens for smaller entities.

FTC sues Surescripts for alleged monopoly in e-prescription market
Makes you wonder how many such anticompetitive practices exist in healthcare IT that raise prices and reduce choice for consumers.

Peer networks drive software decisions by hospital CIOs
Pay-to-play arrangements with technology vendors raise questions about the credibility of analyst rankings such as KLAS. CIO’s have already seen through the rankings game.

The latest from Damo Consulting

The WITCH Monthly Monitor: Monthly update on major global IT consulting and services firms in healthcare
IT consulting firms post mixed results for their healthcare segment in the March quarter

Is it time for consumer data go mainstream in healthcare?
Enterprises value demographic and lifestyle data on consumers more than any other form of data. Consumer data use in healthcare enterprises must overcome a few challenges first.

Podcast – Episode #14: With John M. Kravitz, Chief Information Officer, Geisinger Health
Healthcare IT podcast: “We are standardizing our platforms to be more efficient and cost-effective.”

The WITCH Report: 2018 Annual Review
A review of the financial and market performance of global technology firms in healthcare.


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