Siemens Medical: Invasive Surgery

A mixed prognosis for Siemens' new health-care system.

When it rumbled into the health-care information technology market four years ago, Siemens Medical Solutions promised to redefine the way hospitals create and use information. But the diagnosis of the German giants efforts so far has been mixed.

The companys Soarian medical information system does everything from storing electronic patient records to processing bills. The software is supposed to do for hospitals what enterprise resource planning programs have done for manufacturers: deliver the right data to the right people at every step in the patient-care process to make service delivery as efficient as possible, while reducing errors by replacing paper trails with digital documentation.

"Health care has a whole lot of hurry up and wait," says Richard Eshbach, CIO of Mountain States Health Alliance. "Soarian will give us a way to push the care process along in an appropriate, timely matter and avoid delays."

Soarian arose out of Siemens $2.1 billion acquisition in 2000 of Shared Medical Systems (SMS), a Malvern, Pa.-based company founded in 1969 by three ex-IBM mainframe salesmen. The deal was a big push for Siemens into the U.S.: SMS had 1,000 customers, including Cincinnati Childrens Hospital Medical Center.

Siemens, though, was eager to grab more. The Germans immediately installed their own managers to crack the whip at SMS, whose corporate culture had grown stodgy over the years, according to some customers. SMS last major product rollout was in 1989 with Invision, a medical information system whose core pieces run only on IBM OS/390 mainframes. Siemens pushed to develop an entirely rewritten information-management system, and the company announced details of Soarian about a year and a half after it bought SMS.

But Soarian has been hurt by delays—some of its software modules have been about a year behind schedule. Thats partly because Siemens delivered some shoddy code early in the beta-testing cycle, according to Greg Walton, CIO of Carilion Health System. "They would get stuff from Bangalore, they would ship it to Germany, and then theyd ship it to us," he says. "Then wed say, It doesnt work." Walton says Siemens is still trying to get a handle on the information-technology business. But, he adds, "I think theyre smart enough to figure it out."

Janet Dillione, senior vice president of Siemens Medicals U.S. information-technology group, acknowledges some stumbles out of the gate for Soarian. "Were now being more proactive," she says. Dillione originally said Siemens Medical would provide Baseline metrics showing a decline in bugs reported by Soarian customers; later, however, the company said it was unable to release this data.

In any event, customers say rolling out Soarian is a massively complex undertaking. The full suite of Soarian financial and clinical systems requires a hospital to change almost every one of its business processes, from registering and treating patients to billing them. "Weve been able to build our data repository pretty quickly, but we had to do it from scratch," says Mary Buckley, vice president of information technology at Chester County Hospital, an early adopter of Soarian.

That complexity, combined with Soarians delays, caused at least one customer to give up on it. Baptist Health System, based in Birmingham, Ala., pulled the plug on its Soarian project in April because of "the substantial investment, resource and time commitment required to participate as a Soarian early adopter," the health system said in a statement. Dillione says Siemens Medical and BHS arrived at a "mutual decision" to cancel the project given the customers priorities.

The episode reflects the deeply conservative bent of technology managers in health care. Indeed, even one of Siemens Medicals own employees admits he isnt ready to give Soarian the green light.

Dave Niven holds the title of CIO at Chesapeake Health, a company that operates a 310-bed hospital in Chesapeake, Va. But hes actually a Siemens employee: In 2001, Chesapeake Health set up an outsourcing agreement with Siemens for its entire 25-person information-technology staff. Today, Chesapeake Health runs a hosted version of Invision. While Niven is keeping an eye on Soarian, he says the hospital does not expect to implement it for at least two more years. "The strategy we have here is to be a fast-follower, not in the lead," he says.

Until Soarian has been completely battle-tested, Siemens Medical hopes most of its customers have the same philosophy. But it doesnt have much more time to get it right, says Dr. Barry R. Hieb, a research director at Gartner. "This is the year thats going to make or break Siemens," he says. "If they say, You have to wait another year, their installed base is going to start to erode."

Next Page: Company info and reference checks.