TECH: Healthcare Informatics 100 is not very helpful

The Healthare Informatics 100 list of companies in Health IT is out. It’s fawned over with reverence by lots of companies on the list, and it even gets an encouraging nod from MrHISTalk—who’s usually a lot more sensible. Which is a pity because the list is basically rubbish, and not very helpful to the industry.

Who’s the biggest Health IT company, and #1 on their list? It’s Cardinal Health. Err, really? Well they may have $80–odd billion in revenue, but that’s because they sell lots of drugs wholesale. Even Healthcare Informatics realizes that and has a note saying “share of revenue from IT” and for Cardinal they say it’s 3%. Even that ($3ish billion) from sales in Health IT is a big number, although I think it’s stretching the definition to say that Cardinal has that amount in IT sales. And of course on that logic McKesson should be #2 on the list. But they only make it to #9, somehow down from #4 in 2006

Who’s next? #2 is SAIC. A big time defense contractor with lots of revenue ($8 bn)  from the taxpayer, but only 4% ($200m) in health care. Third and fourth are Henry Schein and CGI. Who? Exactly. (Henry Schein is a medium sized medical products distributor and CGI is a Canadian version of SAIC which bought mid-sized US based outsourcers AMS which had a decent health care business in 2004). Neither of them are real players in health care IT. Henry Schein claims less than $100m in health care IT sales.

#5 is Perot, which is probably in the right place, but #6 is SAS. Great company and all that but it’s probably not even the biggest business intelligence company in healthcare. By the time we get to #7, 8, 9 & 10–Agfa, Sage (ex-Emdeon/Medical Manager), McKesson Provider Technologies and Cerner, we’re now talking about real health care IT companies. Although again the Agfa & Sage rankings are way high as there’s lots of non-health care revenue in there too.

And then there’s a few small companies not on the list — and like in War Games what’s not on the list matters. One is called Siemens, another is GE, and a third is called Philips. Two of those are in the top 4 health IS companies by revenue, not to mention each of their PACS sales alone which probably exceed Agfa’s. For that matter if SAIC belongs on the list where is EDS, ACS, or CSC? (And I’m not talking about #88, an Ohio company with $18m in revenue called strangely enough “The CSC Group”). By the way GE used to be on the list at #1 before it bought IDX because the dummies at Healthcare Informatics used to count its medical imaging business as IT revenue. Now for some reason it’s disappeared.

Finally a bunch of consultants are on the list including some great niche firms like #79 ECG and #89 Healthia. But if they’re on the list where the heck is Deloitte, Accenture, IBM, PWC etc, etc.

So what does Healthcare Informatics, one of the “bibles” of health IT say to defend this schlock it puts out every year?

As you peruse our annual ranking, keep in mind that the data is self reported. As such we rely on the companies to report only healthcare IT-generated revenues and to do it accurately. Though not perfect we have faith that our survey provides a valuable resource to the industry. <SNIP> Some companies may have a significantly different ranking to previous years because in changes of how IT revenues were attributed or defined as a result of reorganization. And absent entirely are some large industry players due to limits on the granularity of the information they are willing to share.

So in other words we’re printing garbage, but it’s not our fault. For a start they know that they’re not ranking companies by their health IT revenue or else they wouldn’t have Cardinal #1, SAIC #2 or Henry Schein in there at all. So it would be easy for them to rank the order by reported health care IT revenue. Why they don’t do that I can’t fathom.

But that’s not the real problem. Do you think Forbes uses the “self-reported” approach when it’s putting out its list of the world’s richest people. Do you think that the Hong Kong shipping magnates, Colombian drug dealers and Arab princes and terrorists on their lists fax in a form detailing their net worth?

Exactly how hard would it be for Healthcare Informatics to make a couple of phone calls to Wall Street (which of course knows the real numbers), do a bit of real investigative work, talk to a few consultants and come up with a decent list. That would provide a real “resource to the industry”. But someone coming to try to figure out the real state of who’s big and who’s not in health care IT from this list would be hopelessly confused.

CODA: And if you’re searching for Healthcare Informatics online, good luck

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  1. So, what are you saying here Matthew? That rankings are only as good as the metrics? I bet even Dr. Novack will buy into that…