Clients seek swift Allscripts turnaround

After a year of chaos and weak financial results, customers ready for change
By Bernie Monegain
08:23 AM

"Concerned, but not panicking," is how Allscripts’ biggest customer describes his reaction to the EHR vendor’s switch at the top -- one that has CEO Glen Tullman stepping down, and former Cerner executive Paul Black, a new member of the Allscripts board of directors, now steering the ship. Allscripts customers give both men kudos for leadership, but say the turnaround has to be decisive -- and quick.

When Allscripts released the announcement at the close of the business day on Dec. 19, it came as the most recent in a long string of disturbances over the past year. There was the ousting of board chairman Phil Pead and the resignation of three other board members in protest. The CFO had already turned in his resignation. Product integration issues continued to dog the company, and the stock price was plummeting.

[See also: Tullman out at Allscripts, Black in.]

“I think that all the Allscripts customers are very concerned,” said John Bosco, CIO at North Shore Long Island Jewish Health System. “This has been a year with disappointing financial results, a turnover of people earlier in the year, with Phil Pead leaving and the CFO and the others at the time. That was very tumultuous – and now this kind of a change. None of those things are things that you want to see happen to a company, especially if you’ve invested a lot in their products – and we have.”

[See also: Allscripts in skid mode as shares plunge, chairman ousted.]

North Shore-LIJ has invested $400 million in its EHR initiative to connect 15 hospitals, 2,500 employed physicians and 8,000 affiliated physicians. It is touted as the largest program in the New York metro area, and one of the largest in the nation.

“So, we are concerned,” Bosco says. “We’re not panicking. We’re not pulling away and thinking of going to other vendors. But, we’ll want to hear from Paul Black how he’s going to turn the company around. It’s going to be very important I think that he shows people very quickly that he understands what the things are that need to be done to make them successful again and that he’s taking the right steps to get that done.”

Black recognizes clients are worried. "I don't think right now that all of our clients are happy,” he said on a Dec. 20 conference call. “We've got a lot of work to do in that space."

"There will be no substitute for results," he said. "We need to move quickly."

At Sharp Healthcare in San Diego, CIO William Spooner (pcitured at right) employs both Cerner and Allscripts technology – Cerner on the hospital side and Allscripts for physician practices. He calls the recent Allscripts announcement “a bittersweet moment.”

“One fine leader has been replaced by another,” he says, and I regard both as friends.

Spooner calls Tullman “one of the most visionary HIT leaders in the business.

“He led Allscripts through an incredible growth period,” he says. “I admire his vision of connected systems and his work towards that goal. Unfortunately the execution has proven more difficult than Glen expected.”

Black, he says, deserves huge credit for Cerner’s growth and operational success.  There couldn’t be a better person to take Allscripts to the next level and achieve the connected community.   

“Glen is leaving Allscripts in fine hands," Spooner adds.

Business is all about timing. As Bosco sees it, timing has not been very friendly to Tullman. Had Allscripts and Eclipsys merged two years earlier than they did (in 2010), “We could have been sitting here now with a lot of that done, then we wouldn’t be having these problems.

By the time the companies merged, Bosco says, the race was already on to acquire electronic health record systems, and Allscripts was just getting started as a merged company. “I think that’s a lot why they are where they are today.”

Moreover Tullman took on the dual role of CEO and COO, Bosco notes.

"Glen is a terrific leader, and I think he was a great fit as a CEO, but the CEO is not the person that you want having his hands very deep in the day-to-day operations of the company, Glen maintained that control – and I think that was a problem. I think that he would have fared a lot better if he hired a very strong COO and was willing to step back a little bit"

Rick Schooler, CIO at Orlando Health in Florida (pictured at left), a seven hospital system that includes M.S. Anderson Cancer Center in Orlando, says customers are not likely to run out looking for replacement products. His own organization, he says, remains “committed to deploying their software to the levels required and expected.”

“However,” he adds, ‘there is a window of time over the coming 18 months that is critical.

With the uncertainty around ownership and leadership behind, and Black’s great reputation and fresh perspective, Spooner says he’s optimistic. 

“I can see those contemplating switching vendors (at huge cost) waiting for six months to see if Allscripts’ execution improves.”

“They've got to get the products, finish the integration and also be convincing the market that they’ve got good products and can compete, and so they can start selling again," Bosco says. “If their sales, and their sales pipeline, don’t start to pick up, then they're going to struggle for the company to be financially successful in the long run.”

“We know all of the CIOs that are Allscripts customers – the bigger ones – and they’re all feeling the same way,” Bosco says.

“I don’t see this as a company that’s on the brink of collapse,” he adds. “I think they have the opportunity to turn it around. They just have to move very decisively and quickly."