Allscripts shares plunge on weak outlook, board changes, unhappy customers - but mostly unhappy customers, I surmise

Glen Tullman is CEO of the health IT seller Allscripts-Misys Healthcare.  He was an advisor to the Obama campaign on health information technology issues.

My organization had to sue his company for non-working products a few years ago (link to PDF of civil complaint) .

Apparently other customers were unhappy as well.  This from Reuters:

Allscripts shares plunge on weak outlook, board changes

Fri Apr 27, 2012 9:24am EDT

(Reuters) - Allscripts Healthcare Solutions Inc's shares plunged 42 percent in premarket trade on Friday, after the company forecast weak full-year earnings, hurt by software development costs and weaker bookings.

On Thursday, the healthcare information technology provider reported a lower-than-expected quarterly profit and also announced the resignation of its CFO, three directors and board Chairman Phil Pead.

Citigroup analyst George Hill said the results were strongly disappointing and downgraded the company's stock to "neutral" from "buy."

Hill said he was most troubled by the loss of long tenured CFO Bill Davis, who had been the public face of Allscripts to investors for many years.

"We suspect CEO Glen Tullman won a power struggle at the 11th hour leading to the board departures," Hill said.

"Too few customers are buying its products, due to lack of confidence or satisfaction," Barclays Capital analyst Lawrence Marsh wrote in a note.

Allscripts shares were trading at $9.27 in premarket trade. They had closed at $16.02 Thursday on the Nasdaq.

(Reporting by Shailesh Kuber in Bangalore; Editing by Joyjeet Das)

The statement 'too few customers are buying its products, due to lack of confidence or satisfaction', speaks volumes about the state of health IT in general in 2012.

That state includes eventual regulation after an IOM report on dubious safety, mission hostile user interfaces as identified by NIST and others that will require expensive remediation (due to the industry arrogantly ignoring this crucial issue for decades), 'glitches' due to poor or non-existent validation and quality control that will increasingly result in expensive litigation when patients are harmed, likely government investigations and clawbacks due to EHR-promoted upcoding, and an increasing awareness that many of the so-called miracle 'revolutionary' gains (as opposed to facilitation of medical practice) are largely illusory industry-promoted memes not based on robust, scientifically-generated evidence.

I'd pull out of this market - if I had any money invested in it.  I have none, and never have, because I have great lack of confidence in the industry that began when I was first exposed to it and its leaders - that being in 1992.

I note that the HITECH component of ARRA, containing incentives and penalties related to health care information technology designed to accelerate the adoption of EHR systems, was advanced largely via advice to the President on the wonders of health IT.  (I thought HITECH was a reckless, premature move destined to waste billions of dollars as did the erstwhile NPfIT in the NHS, and I still stand by that prediction.)

-- SS

4/27/12 Addendum:

EHR glitches like this and this never seem to affect patients...

-- SS