At HIMSS I had a quick chat with Scott Shreeve, the Chief Medical Officer at Medsphere. Medsphere’s product OpenVista, as you all know, is built on the VA Vista product — which is the main “open source” EMR code out there. To get it ready for the commercial market they had to remove the VA- centric features, rewrite the user interface and re-architect the middleware layer using open source technology. For commercial hopsitals they had to enhance the charge capture features for patient billing. They also had to enhance features in the ancillary department systems, and leverage and extend the current data base (which is written in MUMPS).

Their first client, Midland Memorial Texas, has 425 beds in 3 sites. They were facing approximately a $20m price tag for to upgrade their McKesson clinical system. Going with Medsphere is 1/3 the price of a new system but Medsphere had to interface with the McKesson billing system to get the gig.

Are they able to compete with Medtiech in the smaller hospital world? The business model is that they get paid for services and an ongoing subscription for managing it. So they have to provide the open source code, but ideally they want to get the subscription to manage it and so need to do a good job there. Aside from hospitals, they are going to stay in the bigger (i.e. medium-sized) ambulatory clinic market, but do have groups of small physician practices coming together to buy the system — so they do have some opportunity in other parts of the market. They think that they can do move that process down to small hospitals.

What are they doing to address that? They’re developing deployment models that work very quickly setting up systems. They’ve done it with pharmacy, lab & radiology and have have some tools to extend the system. But the software is thin-client but not web-based so there is stuff they have to do in terms of services and installs, and it’s hard to see them moving to a very small hospital market or ASP solution just yet. (They are, after all, waiting to show their first hospital client site fully live!)

And that "open sourceness"? They are changing some of the code and adding some of the new code set back to GPL, but they are keeping some of the code proprietarily for the interfaces and the GUI that they’ve built. So the open source purists may not think that Medsphere is pure open source, but the rest of health care IT will be watching with a great deal of interest to see if they can make a real business selling "free" software and undercutting the bigger guys.

BTW MrHISTalk had a nice interview with Scott a while back