Microsoft Broadening Foray Into Health Care Market

First, Microsoft got its foot in the hospital door. Now it's trying to push inside. Four weeks after acquiring medical software, the company is beginning a sales drive and preparing more products for doctors and patients.

Microsoft last month completed its buy of Azyxxi, clinical software designed by MedStar Health, a network of seven hospitals in Baltimore and Washington, D.C. Doctors use the software to inform medical decisions by pulling together lab test results, images, and insurance information from a variety of computer systems. Microsoft is looking for customers outside the MedStar network.

"We have one customer--we need more," says Peter Neupert, Microsoft's corporate VP for health strategy.

Microsoft will compete with systems from Cerner, Eclipsys, Epic Systems, GE Healthcare, McKesson, and Siemens, all of which have much larger installed bases. "Microsoft wouldn't necessarily be the first company that comes to mind in understanding a doctor's workflow," says John Halamka, CIO at Harvard Medical School.

Microsoft is considering a version of its Office suite tailored for doctors, Neupert says, and may use its consumer market expertise to develop software that could help patients manage their medical information. Steve Shihadeh, a manager in Microsoft's health group, said this spring that the company is mulling a version of Office that uses speech recognition technology to let doctors dictate notes, with a medical lexicon from the company's research labs. Microsoft also is supplying middleware and database software for a pilot electronic medical records network in Massachusetts.

Hundreds of e-records tests nationwide are receiving private and public funding. The Department of Health and Human Services, which is running a dozen of those tests, last week named Dr. Robert Kolodner interim national coordinator for health IT, replacing Dr. David Brailer, who resigned.