Microsofts Health IT Venture Stirs Up Interest

The health IT industry is keeping an eye on Microsoft, as its recent purchase of Azyxxi and alliance with MedStar Health indicate more to come.

Microsofts purchase of a little-known health solutions software company that makes an application based on its own technology framework is a bit like a giant following an ant. It probably wont make much of a difference unless the giant goes to the colony.

On July 26, Microsoft announced that it would buy the eccentrically spelled health intelligence software company Azyxxi and form an ongoing alliance with MedStar Health, the hospital system that fostered it.

The companys software allows clinicians to call up data from different sources, like lab tests and PET scans, giving doctors more complete patient information at the point of care.

/zimages/2/28571.gifClick here to read more about Microsofts purchase of Azyxxi and its implications for health care technology.

Though financial details were not disclosed, the acquisition of the software, built using Microsoft tools, likely poses little investment or technological risk to Microsoft, according to analysts.

"I just dont think its that big of a deal," at least for the short term, said Scott Tiazkun, a health care software analyst with consulting giant IDC, in Framingham, Mass. "You could call it a me-too move in health care." However, if Microsoft followed this acquisition with others, he said, it could cause a shift in the health care IT field.

Microsofts alliance is similar to actions taken by other software giants. In 2005, GE Healthcare, of General Electric, announced a 10-year, $100 million collaboration with Intermountain Healthcare, in Salt Lake City. A joint research center was established near IHC facilities so that engineers could readily consult with and observe clinicians.

Intermountain CIO Marc Probst said that about 130 employees are currently working on the project; about two-fifths are GE employees, with about 25 hired specifically for the joint project.

Though it does not place engineers on-site, IBM has announced several looser collaborations with academic hospitals, including the Mayo Clinic, and an eight-year, $400 million dollar deal with the Pittsburgh Medical Center.

Both GE Healthcare and IBM paired themselves with famous hospitals. Intermountain Healthcare in particular is known nationwide for its early and pervasive adoption of health IT. It has 21 hospitals and over 100 clinics.

Microsofts partner, Washington-based MedStar, on the other hand, has an excellent reputation for IT, but it has fewer hospitals and a lower profile.

Tiazkun speculated that Microsoft might intend to woo smaller hospital systems: "Microsoft doesnt have to go the prestige route, it goes the way that makes sense for its customer base."

The Azyxxi software addresses a well-recognized need in health IT: integrating "silos" of patient information so that doctors can see relevant information at the point of care. Written and implemented by clinicians at MedStar, the software was first deployed in MedStars Washington Health Center to provide real-time access to patient information.

According to Microsoft, Azyxxi, built on the Microsoft .Net Framework and with Microsoft SQL Server database software, can handle terabytes of data and scale across devices such as Tablet and Pocket PCs.

Already, companies that include InterSystems and Sun Microsystems subsidiary SeeBeyond have undertaken large projects allowing disparate health information stored at different institutions to be viewed on a single screen. First Consulting Group, which helps hospital integrate their systems and is allied with SeeBeyond, declined to comment for this article, as did InterSystems. Sun did not respond to requests for interviews.

In fact, Tiazkun said, if Microsoft hopes to become a solutions provider, many more acquisitions are likely to follow, "because its a horizontal company thats trying to expand its presence in a vertical industry."

Microsoft is rumored to be creating a health care portal and other consumer-based services that could rival Google. Though Microsoft is a late arrival in health IT and its next steps are still unclear, health IT advocates have said the giants presence could unleash technical and other resources into the space.

/zimages/2/28571.gifClick here to read more about recent information-sharing IT projects in hospitals.

Indeed, the day that Microsoft announced that it would purchase Azyxxi, Sen. Patty Murray from Washington state called on the government to expand investment in health IT.

Intermountains Probst said he had mixed feelings about Microsofts move, partly because the company had not painted a clear picture of what it would be developing. On the one hand, Probst said, more large players in the health care space could lead to a faster adoption of standards, and Intermountains health care system already uses Microsoft products.

On the other hand, he said, he worried that established vendors could be scared off by the potential for competition.

Though Tiazkun said Microsofts acquisition could not regarded as anything but a first step in a much longer process, he said the expansion of Microsoft into health care could be good for the company and good for hospitals. "Theres a lot to figure out and a lot of opportunities. Its certainly not too late," he said.

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