Allscripts reboots to weather the storm

HAPPIER TIMES: Eclipsys CEO phil pead and Allscripts CEO Glen Tullman shake hands upon the two companies’ 2010 merger, which made pead chairman of the Allscripts board.

Clients, analysts take wait-and-see stance

CHICAGO – It’s not business as usual, but more like rebooting at Allscripts headquarters now that the waves are beginning to settle after what some market analysts described as a “dismal” quarter for the electronic health record company.

Not only did it post record low earnings, but also it lost its CFO to another company, fired its chairman and three other board members left with him in solidarity. To top it off, stock price plunged as much as 43 percent.

Left steering the ship is CEO Glen Tullman, who has been at the helm for 15 years, veering off course only recently, the result of a troubled merger with Eclipsys in 2010, customers say. The merger gave Allscripts, which had until then been focused solely on the ambulatory care market, ready entry into the acute care space. With the merger came challenges with integration – both product integration and melding of two company cultures.

The company has not given a reason for firing its board chairman, Phil Pead, who came to Allscripts as part of the Eclipsys deal, and Tullman diverts the question, saying: “My focus today is all about our clients, how we help them improve healthcare, and ensuring we execute against our priorities.” Tullman says Allscripts is well positioned to succeed. “We have the right leadership team in place and have made the investments to enable us to lead the industry.” (See a Q&A with Tullman on Page 38).

Tullman boasts that Allscripts customers are a loyal bunch.

Perhaps one of the most loyal is John Bosco, CIO of North Shore-Long Island Jewish Health System, self-described as “the largest Allscripts customer by orders of magnitude.”

“What I see bodes well for the future,” Bosco says. “In the end it will enable Glenn to make the changes that are needed.”

“Glen is severely challenged yet a strong leader,” says Bill Spooner, CIO at Sharp Healthcare in San Diego. Sharp has deployed Allscripts EHRs on the ambulatory side, with Cerner system in place in acute care. “Stay tuned for a hot summer,” adds Spooner, who admits to being concerned.

Charles Christian, CIO at Good Samaritan Hospital, a 232-bed hospital in Vincennes, Ind., says the recent troubles at Allscripts have him on high alert. Good Samaritan uses Allscripts EHRs for physician practices and McKesson Horizon in the hospital.

“When any of our primary vendors struggle from a corporate standpoint, it kind of raises the hairs on the back of my head,” he says. “It makes me watch very, very carefully.” Christian has observed other mergers over the years – some successful, some failed.