Behavioral Healthcare Software and Technology Companies Convene to Explore Collaborating

By Tom Trabin, Ph.D., M.S.M.
[Note: an edited version of this article was published in the February 2000 issue of the Behavioral Healthcare Tomorrow Journal]

On March 18, 1999, leaders of major behavioral health software and technology companies met in a historic five-hour meeting at the Behavioral Informatics Tomorrow Conference in San Jose, California.

The subject of this meeting: What are the common grounds these companies can use to benefit the broader behavioral healthcare field, their customers, and their own companies.

Participants shared their perspectives openly in a thought provoking and productive discussion. It became clear that a continuing dialogue among these leaders would yield positive results. The group, open to all behavioral health software and technology companies, has accordingly begun a cycle of more frequent meetings and discussions. They held a two-day meeting in Florida in May, a one-day meeting in San Francisco in September, and scheduled a fourth meeting for mid-winter 2000 in Florida. With ongoing assistance and guidance from Paul Duck, it has been my pleasure and honor to organize and facilitate these meetings for the companies, and to help them launch the projects they decide to initiate.

The companies represented in these meetings (*see list adjoining this article) serve the full range of behavioral health organizations and must address their customers' diverse software and technology needs. Many of the companies focus on clinical provider organizations, and offer practice management software for such functions as billing, scheduling, treatment planning, and clinical records. Some are focused on managed care organizations and offer such functions as claims processing and adjudication. A few focus exclusively on clinical specialty software such as decision support for evidence-based treatment planning and outcome measurement.

Top executives from each company are the representatives at these meetings. They constitute a group of dynamic entrepreneurs, highly sensitive to the needs of and changes in the behavioral healthcare market. While they are driven by market demands, to some extent they also help shape those demands. The discussions are open and frank. They exchange information regarding their companies' strengths and weaknesses, the types of partnership arrangements they have established, the recent and anticipated future industry developments they must address strategically, and the factors likely to contribute to future partnership successes and failures. As a group, they have already launched the following projects:

· a website at

· a large-scale study of the market size for behavioral healthcare software, to guide and support future financing and development efforts (see ad in this journal)

· a task force to identify the most needed informatics standards for the field and to consider working on their development and promotion

· a task force to explore the feasibility of forming a trade association

· promotion of a national informatics conference and trade show

· promotion of the Computer-Based Patient Record Institute's Davies Award for a behavioral healthcare organization's computer-based patient record system

Vendor executives at the meeting provided penetrating insights related to forming partnerships and to several of the project launches mentioned above. Many of these insights will be of interest and use to readers of this journal. Some are summarized briefly below.

Ingredients for a Successful Partnership The driving forces for increased partnerships among behavioral healthcare software and technology companies come from the market. The broader behavioral healthcare industry has undergone a massive consolidation, and the software industry may be impelled to follow. Software and technology vendors generally think some consolidation would likely improve software companies' professionalization, size, and market share. They also think it would improve responsiveness to customers' increasing requests for ready-made integration of complementary software products. Many of the software companies are not clear what the limits should be of their market segments and of their software development efforts. Customers tend to encourage their software company of choice to develop broader functionality rather than to look elsewhere for those added functions. Consequently, many companies have well-developed applications for some functions and only partially developed applications for some other functions. When two software companies begin discussions about a partnership, they often find multiple areas of overlap in functionality and have to make difficult decisions whether to give up their software development efforts in areas of less strength.

Partnerships vary in investment and commitment. At the "lightest" end of the continuum are non-exclusive "utility" agreements to link products for co-marketing, in the middle are exclusive arrangements to co-link products, and at the most intensive end are actual mergers and acquisitions between companies. The more intensive the commitment, the more complex and time-consuming the initial arrangements may be.

Any type of partnership between companies is a challenging undertaking, for which ambivalence is a natural but often fatal obstacle. The negotiations are time consuming, particularly for the top executives whose time is most precious to their companies. The initial deliberations require divulging sensitive proprietary information that can give an advantage to competitors. If the partnership commences, there are other costs in software customization and integration.

Some of the software and technology companies in the meetings have entered into highly successful partnerships and were able to articulate many of the necessary ingredients. Some wrote about those ingredients for publication (Jackson and Farook, 1999). The ones discussed at the meeting were:
1. Set clear goals in common at the beginning of the negotiations, so the desired outcomes are known.
2. Be frank about partnering concerns at the beginning of the negotiations.
3. Make certain there is a good match of corporate mission, values, and cultures.
4. Address areas of product overlap.
5. Make certain the products to integrate have a similar look and feel, even though the functionality differs.
6. Have a clear exit strategy that includes how unmet goals will be identified.
7. Look for differing but complimentary perspectives between the two (or more) prospective company partners.

The Need for Information System Standards

To varying degrees, the paucity of information system-related standards in behavioral healthcare causes problems for software vendors. It is much more difficult to integrate software products from different companies when they are based on different standards (or, with regards to some elements, no standards at all). It is also frustrating to plan new application development efforts without having clear standards upon which to base the application. Standardization will help the behavioral healthcare software industry to meet many customer needs more easily and effectively.

More complete and detailed standards are needed for data elements, forms, electronic interchange, data privacy and other aspects of behavioral health information systems. Yet behavioral healthcare as an industry is not a presence at the table when information system-related standards are set for the larger healthcare field, so our field's specific needs go unaddressed. If the group of software and technology executives attending these meetings were to take a formal interest in data standards as a group, they would likely become a magnet for invitations to join with the efforts of larger healthcare standards-setting initiatives.

As a group, the behavioral health software and technology companies decided to take the first step towards standards development. A subgroup volunteered to work together as a task force and identify the gap in standards that causes the most difficulty for them. These prioritized targets for standards development would be brought to the next vendor group meeting in mid-winter for discussion. The task force would also identify what work towards developing standards in these areas had already begun by such organizations as the Workgroup for the Computerization of the Behavioral Health and Human Services Record, the federal government's Center for Mental Health Services, and others.

Forming a Trade Association

The software and technology companies represented at these meeting, all led by busy executives, regard the meetings as sufficiently important that they have planned four within a 12-month period. They are now considering forming a trade association to formalize a structure for their meetings and related initiatives. A task force was assigned to work with an attorney in defining the next steps necessary to accomplish this, and determine the associated costs. Their findings will be discussed at the next meeting. If a trade association were to form, the vendor group identified beneficial purposes and functions to be:

· Promote industry standards for data and information system-related functions;

· Share the costs of conducting periodic market research studies;

· Facilitate sharing among members of their knowledge, resources and expertise;

· Educate prospective customers/users regarding the value of behavioral health software products and general information technology to improve their business and clinical processes;

· Educate the public regarding a variety of issues related to behavioral health software;

· Provide a continuing venue for partnering discussions

· Sponsor a national conference on behavioral health informatics.

As editor of the informatics issue of this journal and chair of the Behavioral Informatics Tomorrow national conference and exposition for the past seven years, I have observed with pleasure software vendors gradually move towards increased collaboration with one another. The behavioral healthcare market for software is small and intensely competitive--not nearly as technologically oriented nor as inclined to spend money on information technology as the broader healthcare market. To complicate matters further, the information technology needs of behavioral healthcare organizations are increasing, and with it their demands for highly comprehensive software. It will benefit current and prospective software purchasers if vendors can partner with each other to integrate software functions more effectively and thereby meet purchaser needs. It will benefit all stakeholders- behavioral health consumers and their families, clinicians, administrators, researchers and policy makers--if those authorized to access information can do so more efficiently, and if the information they access is better organized to enhanced decisions regarding how care is managed and delivered.

Jackson, R. and Farook, Q. (July-August, 1999). From a Handshake to Partnership Success. Behavioral Health Management, 19 (4), 42-43. ]

* Companies listed below have participated in at least one of the three meetings held during the past year or have registered for the upcoming (fourth) meeting at the Hyatt Regency Westshore in Tampa.

Accurate Assessments, Advantacare, AIMS, Anasazi, Askesis Development Group, Behavioral Health Outcome Systems (BHOS), Behavioral Health Partners, Blackberry Technologies, Catalyst Integrations, CCMS, Centromine, Civerex, CMHC Systems, Compass/Integra, Computer Assisted Treatment Systems, Creative Sociomedics, Earley Corporation, Echo Management Group, IMA Systems, InfoMc, Medipay, Oak Group, Pathware, Psychological Corporation, Technica

Tom Trabin, Ph.D., M.S.M. is Associate Editor of the Behavioral Healthcare Tomorrow Journal and is a consultant in private practice in Tiburon, CA. He can be reached at 415-435-9784.



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