Medsphere writes hospital software based on the public domain VistA system written for the Veterans Administration. Misys, on the other hand, had been a proprietary company, offering software for medical offices.
The New York Times launched a debate into the approach following the Misys release. Misys had actually gotten an endorsement from Newt Gingrich, one of whose projects is the Center for Health Transformation, before making its announcement.
Gartner analyst Wes Rishel compared this to other open source efforts where failed proprietary products toss their code on the market, suggesting software as a service (SaaS) is a better way to automate doctors' offices.
New Medsphere CEO Michael J. Doyle came from a SaaS company involved in medical billing. But Rishel was probably thinking more of AthenaHealth CEO Jonathan Bush, who spoke with Times writer Steve Lohr shortly after he spoke with Rishel.
The real key here is not open source, but open standards, allowing all medical software to interoperate. How this is done is less important than assuring it is done.
So where will it be done?
Most medical offices are attached in some way to larger hospitals, where the doctors hold privileges, and it is the decisions of these hospitals which usually control automation. If they say, "Get XYZ Proprietary now" it shall be done. If they affiliate with an insurance carrier specifying a proprietary platform, that's what the doctor will have installed.
It doesn't matter if there are good SaaS or open source or open standards offerings out there. If the guy above you says jump, you jump. I suspect this is true in many other industries besides medicine.