OSI (SpaceLabs) Releases Financials
It looks like SpaceLabs is doing better in their new home, after GE's acquisition of Instrumentarium left them twisting in the wind.
The Healthcare Group reported record revenues of $54 million for the second quarter of fiscal 2005, compared to $3.3 million reported for the second quarter of fiscal 2004. For the six months ended December 31, 2004, revenues increased by $90.2 million, to $96.8 million from $6.6 million for the comparable period of fiscal 2004.
Income from operations for the second quarter of fiscal 2005 was $5.8 million, a 10.7% operating margin, before Spacelabs-related amortization and retention expenses of $903,000. This compares to a loss of $456,000 for the second quarter of fiscal 2004. For the six months ended December 31, 2004, income from operations increased by $7.7 million, to $6.9 million, before Spacelabs-related amortization and retention expenses of $1.8 million. This is compared to a loss of $794,000 for the comparable period of fiscal 2004.
Datascope Stumbles with Panorama Shipments
The good news for Datascope is that they had a $6 million backlog of their new wireless network and central station on December 31, 2004. The bad news is that they can't ship it because a new software release is late.
Datascope introduced Panorama just last July. Prior to the release of Panorama, Datascope was OEMing a system from Vitalcom (who was acquired by Data Critical). With the acquisition of Data Critical by GE, Datascope was in the uncomfortable position of buying an OEM product from a major competitor.
Plug and Play Medical Device Connectivity Initiative
A fresh initiative aims to make medical device connectivity “plug and play” within 3 years. As reported in the January issue of the AAMI newsletter, the story describes efforts lead by representatives from Boston-based Partners Healthcare and Kaiser Permanente in cooperation with the FDA, other health care professionals, and the U.S. Department of Defense. Most medical devices with network connectivity (serial interfaces need not apply) already have gateways or HL7 interfaces. But devices have very far to go indeed before they can plug and play on par with DICOM and diagnostic imaging modalities. Connectivity in health care started with the IEEE medical information bus, or MIB. How DICOM came to fruition in less time is a mystery to me.
“The concept is that individual medical devices would be networked to allow the communication of data from one device to the other and the control of one medical device by another, as well as allowing the implementation of clinical rules or guidelines,” explains Julian M. Goldman, MD, of Massachusetts General Hospital, principal investigator for the project.
The goal is not only passing data, but also interoperability between devices and between systems and devices. Interoperability means “remote control” of a device by another device or a system. HIT vendors have been seeking ways to do closed-loop control between medical devices and their systems for some time. Great advances in patient safety and improved outcomes are to be gained by combining the information in an EMR and a pump or monitor. McKesson’s efforts with Alaris, and Cerner’s work with Hospira are examples. HIT vendor’s efforts by definition, require multi vendor integration. Companies like HEI and Capsule Technologie have built businesses out of providing cross vendor connectivity. However, both these companies have built business models on connecting standalone devices with simple serial ports. Increasingly, medical devices offer their own integrated network connectivity.
One area screaming for plug and play (and interoperability) is alarm management and alarm notification. Nurses have many different types of devices (monitors, various pumps, vents) that they must manage. They need one means of receiving and responding to alarms generated by any device connected to their patients. HIT vendors are coming at this with automated worklists and alerts. Connected device vendors are providing this control (albeit proprietary) from central stations. Throw in currently standalone devices, cross vendor connectivity and interation with information systems and you’ve got one killer patient safety and nurse productivity solution.
Certainly recent technology makes plug and play connectivity technically more feasible. Software protocols like SOAP and XML-RPC, the new low-power 802.11 a/b/g radio chip sets, and a new wave of WLAN infrastructure commoditization all contribute to making this goal more achievable.
There are barriers to achieving Dr. Goldman’s connectivity goals. Regulatory concerns about patient safety are a huge concern. HIT vendors will go through contortions to avoid a 510k, and embedded device vendors will fear this sudden loss of end-to-end control that plug and play requires. Developing intended use statements, risk analysis, verification and validation of interoperability between devices and systems will require a monumental effort. Strangely, vendor strategies to lock in customers by artificially erecting changing costs (usually by way of proprietary features) are not mentioned.
Every market in which I’ve participated in the transition from standalone devices to connected systems has been marked by a demand for open connectivity. No buyer wants to get locked in or face artificially high changing costs. The ability to mix and match when grandually transitioning from one vendor to another, or creating a system out of best of breed devices has always been a desire.
Philips Telemetry to Use New Hospital WLAN Technology
According to an updated page on their website, Philips has abandoned their “channelized” radios for a frequency hopping, bi-directional, spread-spectrum WLAN in the WMTS band. They’ve joined GE and Datascope with similar WLAN technology in WMTS. They couldn’t resist coming up with their own name, so they’re calling it “Smart-hopping Technology.” From this diagram, it seems that they’re using a private LAN connecting their access points to their central stations. Apparently they can bridge to the Hospital LAN at the central station or a server for HL7 connectivity.
This means that for all of you who recently upgraded your Philips Telemetry system to move to WMTS, you will need to install a new network infrastructure that duplicates the antenna system of the older channelized system if you expand your system. There is no press release or other information offering any more details at this time.
[Update] I got a nice email from a contact at Philips who said that Philips has not publicly announced their new telemetry network (although the page is still up on their site).
[Update] More info on Phiip’s new wireless network. They will continue to offer their channelized radios (in the 608-614Mhz band) for traditional Telemetry deployments and international markets. The new network uses the upper 1.4Ghz WMTS band, and with greater capacity for networkd devices, is geared for hospital-wide monitoring deployments.
Philips has developed a component radio module that can be integrated into a range of monitors. The radio and APs are based on the DECT protocol (Digital Enhanced Cordless Telephoney). This standard from Europe is used for private wireless phone systems, like SpectraLink phones. PMS is leveraging a core competancy in DECT technology that Philips corporate has developed. You can find an introduction to the standard here (requires registration – email me and I’ll send you the .pdf). They chose DECT because, like voice, continuous monitoring requires requires low latency and virtually no dropped packets.
Leveraging DECT provides an industry standard, with associated economies of scale and robustness. However, by creating their own WMTS implementation of DECT, Philips has created a proprietary network. Change vendors and some of the network infrastructure will have to be replaced. Multi vendor coexistance at 1.4Ghz is also a question.
The radio is currently integrated into their telemetry monitors, but won’t be available in multi parameter monitors until this summer. Current capacity of the network is 128 devices. This will be expanded to 512 devices by this summer, and is theortically expandable beyond 512.
Infrastructure is made up of (from the edge in) access points (APs), controllers (thin APs?) and switches. The APs are power over Ethernet (POE) where power and network connection are on the same wire.
Intel Bravely Enters Health Care Market
Intel announced (last week actually) that they've reorganized their company along key vertical markets — and for the first time, designated health care as a target. It seems that these large companies catch “healthcare fever” from time to time, thinking more about the market opportunity than core competancies or what a strange and alien place the health care market really is.
“ Industry analysts [who all see Intel as a potential fat cat client] say computer chip maker Intel’s recently announced move into the healthcare IT market is the right decision at the right time.”
I don't want to date myself too much, but who remembers AT&T's foray into PACS? And IBM has skirted health care for years, starting with PCS, a specialized bedside computer, and a very cool EMR (that they consequently gave to the IBM/Baxter Systems Division joint venture — and that BSD proceeded to ruin). Some of these efforts resulted in meaningful adoption (okay, I can only think of PCS) but none of them made money, and in each case the company ended up exiting the business.
Intel's potential product focus includes, “ …technology platforms to support remote monitoring, wearable monitoring devices, or platforms associated with handheld devices and security applications .” Some of this is cutting edge stuff — costly R&D, significant regulatory hurdles, loooong market adoption — not an easy task for a company that lives quarter to quarter. Another guess at the direction that Intel might take includes, “ …technology platforms to support remote monitoring, wearable monitoring devices, or platforms associated with handheld devices and security applications.” All this “platform” talk hints at general purpose computing technology tweaked for healthcare. Hmm, a “gateway on a chip” with Zigbee and 802.11a/b/g radios would certainly hasten the introduction of wireless sensor based monitoring.
Healthcare fever has been survived through a couple of treatments: acquisitions (GE comes to mind) or spinning off a separate company (Delphi Medical is a new entrant along these lines). Typical experience includes spending lots of cash hiring people and developing technology, hitting the collective head against the wall repeatedly, lay-offs and write-offs, and (if they're lucky) a resulting set of products based on their core business that's applicable to health care.
I wish Intel the best. Some of their prospective products could contribute to improved patient flow via the Universal Bed concept.
