This Blue-Chip Joint Venture Is Quietly Gaining Ground

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When two giants like General Electric (NYSE: GE  ) and Microsoft (Nasdaq: MSFT  ) join forces in a new venture, you might expect big and bold headlines. But that really hasn't been the case with Caradigm, a 50-50 joint venture between the two organizations.

Caradigm officially launched in June, after GE Healthcare and Microsoft announced plans for the company in late 2011. The new entity combines Microsoft's Vergence and expreSSO single sign-on solutions and Amalga health-intelligence platform with GE Healthcare's eHealth health information exchange and Qualibria clinical knowledge application environment.

Quietly gaining
While there have been no huge announcements from Caradigm in the company's inaugural three months, it has been quietly gaining ground. INTEGRIS Health, Oklahoma's largest health-care system, implemented Amalga recently. Oregon-based health information network OCHIN also selected Amalga for its operations.

Caradigm's other relatively quiet recent announcement could help position the company well for the future. In cooperation with the Keystone Beacon Community (led by Geisinger Health Systems), Caradigm developed a tool to transform minimum data set (MDS) transactions to Continuity of Care Documents (CCDs).

Skilled nursing facilities across the U.S. must file MDS transactions electronically to the Centers for Medicare and Medicaid Services for each patient at specified points of care. Many of these facilities, though, don't have the capability to generate CCDs, the standard for electronically sharing clinical data with health information exchanges.

While skilled nursing facilities are not currently included under electronic health record (EHR) Meaningful Use incentives, the hospitals from which most of these facilities receive patient referrals are eligible for incentives. Because exchanging CCDs with business partners fits into one of the EHR certification requirements, look for hospitals to exert pressure on skilled nursing facilities to support CCD interoperability.

Caradigm's MDS-to-CCD solution could be a big help for skilled nursing organizations wanting to keep in their hospital partners' good graces. Since the company's approach doesn't depend on the skilled nursing facility's EHR system (it even works when there is no EHR system), this quiet announcement should sound very good to the ears of many in the post-acute-care industry.

Going forward
IDC Health Insights lists Caradigm among the top health information exchange (HIE) vendors. Other large competitors in IDC's list include Oracle (Nasdaq: ORCL  ) , which was listed as a top five vendor in the space. Other companies to make the list included IBM (NYSE: IBM  ) and RelayHealth, a business unit of McKessson (NYSE: MCK  ) . All of these vendors face challenges in the HIE market, especially budgetary constraints for prospective customers.

Continued quiet wins by Caradigm could show that GE and Microsoft made the right decision in teaming up. However, this health-care venture isn't likely to move the needle too far for either company in the near term. For software giant Microsoft, it all comes down to the success of Windows 8 and the company's ability to make inroads in the mobile arena. Find out about these opportunities, risks, and more in The Motley Fool's premium reports on Microsoft. Get your copy, which comes with a full year of updates included.

Fool contributor Keith Speights owns no shares in the stocks mentioned above. Motley Fool newsletter services have recommended buying shares of McKesson and Microsoft, creating a synthetic long position in IBM, and creating a synthetic covered call position in Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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