The Healthcare Information and Management Systems Society continued its evolution into a group serving information technology vendors as much as providers with its plans to acquire a database company that sells IT market research on healthcare organizations to IT vendors.
The reaction from the HIMSS membership to the new association direction "remains to be seen," said Marion Ball, a consultant with Houston-based Healthlink who will join the parent HIMSS board July 1. "This is untested water. ... It could have concern for the very conservative that (HIMSS) should be all lily-white and pure and that (association and commercial activities) should be separate and never mix."
When completed in mid-July, HIMSS' $6 million acquisition of the Dorenfest IHDS+ Database from Chicago-based Sheldon I. Dorenfest & Associates will bring an additional 30 employees to a growing HIMSS organi-zation. The new employees and the associated revenue from the acquired business represent the bulk of a $4 million budget for the separate business venture, called HIMSS Analytics. Dorenfest & Associates will continue to exist as a consulting firm. Modern Healthcare first disclosed the deal in an e-mail alert on June 8.
By assuming control of the Dorenfest database, which collects details on more than 4,000 of the nation's 4,900 nonfederal acute-care hospitals, the Chicago-based association of 14,000 information professionals hopes to generate an annual return of about 7% on its investment in gathering demographic and software-status data from hospitals and their associated provider organizations and marketing the information to IT companies and consulting firms.
Revenue from the Dorenfest database product and a 1-year-old HIMSS database operation will generate most of the revenue for the first year of the new unit's operation. But the management team hopes to rev up a consulting business and enhance existing market-research services to exploit the "fairly significant untapped potential" of the Dorenfest data, said Stephen Lieber, HIMSS president and chief executive officer.
Lieber did not see a conflict of interest in making a profit off detailed disclosures provided by its members, calling it a common practice for a trade association. "It is a core competency to have information about the field it represents," he said.
Since it merged in January 2002 with the Center for Healthcare Information Management, a trade group of IT companies and consulting firms, HIMSS has represented both sides of the sales transaction. Currently five of its 12 board members represent the vendor-consultant sector.
The Dorenfest database has information in 56 software application categories detailing the products currently installed at nearly 1,500 healthcare organizations, their plans to seek replacement systems or new software capabilities, and the executives and others involved in IT buying decisions.
Hospital chief information officers and their staffs fill out questionnaires asking for the demographics of their organizations, the roster of key executives and managers, and the types of software applications installed or likely to be added, said David Garets, president and CEO of HIMSS Analytics.
"It's a prospecting database," Garets said.
The task of managing questionnaire-gathering and updating the information in the database costs Dorenfest about $4 million per year, said Lieber. "That's a huge expense to provide that kind of service to the industry, so you have to recover your costs" through a commercial business model, he said.
The industry "mustn't prejudge" the association's intentions, said Ball, who was a hospital CIO for decades before becoming a consultant. Though aimed mainly at suppliers, the Dorenfest database for years was about the only source of information out there, she said. "What was better? It at least gave us an idea of what was going on in the industry."
Four years ago HIMSS had 41 employees and $10.2 million in operating revenue, but since then the association's staff has swelled to 69, a 68% increase, in step with a sustained expansion of programs and services.
Revenue and expenses rose about 80% during that time-operating revenue as of June 30, the end of the HIMSS fiscal year, is expected to total $18.3 million.
