Health Business Blog

This is the transcript of my recent podcast interview with Quantros co-founder and CEO Dr. Sanjaya Kumar.

David Williams: This is David E. Williams, co-Founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Dr. Sanjaya Kumar.  He is CEO of Quantros.  Dr. Kumar, thanks for your time today.

Dr. Sanjaya Kumar: Thank you David.

Williams: There is a lot of attention being given now to implementation of the HITECH Act. I wonder whether this concept of meaningful use is going to have a real impact on the care of patients.

Kumar: Definitely David.  It is really an unprecedented era for such a large influx of dollars to be used to provide more digitization of health care settings and health care environments.  So there is a lot more data available on patient care as well as the patient experience with health care. I think over a period of time this will result in some very meaningful information and knowledge bases that can help guide people to provide better, safer, high quality care.

Williams: Over the last couple years the federal government has been moving to refuse payment for so-called never events and then potentially expanding that to others sorts of preventable problems like infections that are acquired in the hospital. Is that likely to have a significant impact?

I’ve seen varying commentary. A lot of people say, “Well it’s just such a small percentage that it’s not really going to make a difference,” and then some people think it has more of an impact.  I wonder where you fall on that spectrum.

Kumar: All of those changes are heading in the right direction.  We should be paying for quality.  We should be paying for performance.  We should not be paying for things that are definitely preventable.  So I think payment for health care is headed in the right direction at least from the consumer stand point.

Now, how much of an impact will it have on the grander scheme of things? I don’t think people realize the cost of preventable medical errors.  Preventable errors account for nearly $30 billion in excess health care expenses per year.  That money can be utilized to further health care in a much, much better way.  We have to think about how all of these changes will be effectuated into the mainstream, into other payer mechanisms.  It will be interesting to see how the other payers begin to bring about some of their own programs following the example set by the Center for Medicare and Medicaid services.

Williams: Tell me a little bit about Quantros’s business and how you fit into the overall health care ecosystem.

Kumar: I co-founded Quantros 10 years ago.  At that time the Internet had just come about and the premise for Quantros was to utilize the Internet to become a networking vehicle for folks that were interested in improving quality and safety. We wanted to collect appropriate data and be able to have measurements of specific metrics computed in real time and to be fed back to those users that were interested in making changes. We wanted to provide real-time comparative and benchmarking information.

From the beginning we focused on quality and patient safety. We’ll continue to perpetuate that journey with software as a service applications that are delivered via the Internet into secure Intranet portals of health care institutions that are interested in using them.  For example our safety and risk management product helps facilities to track, monitor, collect and analyze data on common, preventable medical errors that occur within their facilities. They are able to then look at all that data and information and be able to provide meaningful evaluation of processes and to effectuate interventions and then track them to see whether they’re having an impact.  We see the great benefit now with all the focus from the health stimulus package on tapping into more electronic repositories of data from the electronic medical records, aggregating that data into our quality and safety monitoring tools and feeding back some really good, meaningful information on a much broader data set than was available before.  So really we see this as a great positive for us in terms of the movement within the health care industry.

Williams: Quantros seems to have been quite active in the business development front lately.  If I’m not mistaken I think you acquired MediQual recently and also announced a partnership with Allscripts.  What can you tell me about those?

Kumar: Well MediQual was actually our foray into becoming recognized as a vendor to do more state-based data reporting.  The MediQual program that we acquired from Care Fusion primarily supported the PHC4 initiative within the State of Pennsylvania –or the cost containment council. The State of Pennsylvania certainly were pioneers in public reporting of quality data. That program started 15-odd years ago and is definitely a key program to emulate in the public reporting of data. We wanted to be at the forefront and set up all those initiatives and be recognized for that. The acquisition is definitely helping us.

The partnership with Allscripts is actually with the division that provides case management and dicharge planning tools.  We are integrating those applications with our quality reporting and our safety and risk management reporting to allow for seamless integration with case managers.  We will have concurrent quality monitoring and far more proactive ways that care managers can address patient safety concerns and issues at the bedside.  The Allscripts initiative will further our play into the area of meaningful use of data from point of care solutions with monitoring solutions like ours.

Williams: I understand that you now sponsor Clinical Café, a new social networking community that’s focusing on patient safety.   Can you tell me about that and what the thinking was behind it?

Kumar: That journey started about two and a half years ago.  I began to see the evolution of social media and networking toole that were beginning to be perpetuated throughout the Internet with MySpace and Facebook and Sermo.  So the concept was very simple: how to take some of the conceptual frameworks around Google, around social networks and how to combine all of that for professional communities that want to interact with each other?

The premise of Clinical Cafe was to benefit our network of users.  Today, Quantros supports over 2,200 hospitals with one or more of its applications with a registered user base of about one million.  So we have about one million users; physicians, nurses, pharmacists, risk managers, compliance officers, quality officers, all with very, very specific needs.  We wanted to provide an environment where they could easily connect with each other, share information and best practices to improve quality and safety with each other, inform each other or chat with each other and to have much more rapid communication and sharing of information.

So connect, share, inform and learn were the premises of Clinical Cafe.

When I designed it, when I thought up Clinical Cafe I really wanted it to be launched with a virtual avatar-based, Second Life-style cafe so you could virtually have coffee with your counterpart, with you peer or colleague in a cafe on the Internet and communicate with them.  I think that is still to come according to my engineers.

The first version of this particular environment provides the tools that you would see in Facebook but geared toward the user community as well as the community of colleagues and peers that we service within health care. I will be interested to see how they will interact with each other.  What will they be talking about?  What kinds of best practices will they be sharing?  We’re going to be providing tools where they can record videos on their best practices and share with people.  So it will be interesting to see how that journey takes off.

Williams: You mentioned at the beginning that you founded the company 10 years ago. That also made me recall the famous IOM Report that came out at the time (To Err is Human), which has celebrated its tenth anniversary.  If you look back over those ten years, not just from a corporate standpoint, but from where we are as a medical system, how are we doing on addressing the issues that were raised in that report?

Kumar: Actually the IOM report shaped Quantros’s journey.  Now, where have we come as an industry?  Where have we come as a population in terms of really addressing patient safety and quality?

I think the journey has just begun to get widely recognized. The IOM report actually allowed us to be shocked like, “Wow, I didn’t know this was of such high epidemic proportions!  I didn’t know that medical errors were killing more people than HIV, AIDS, motor vehicle accidents, and breast cancer combined.” Virtually a jumbo jet going down everyday.  That was the magnitude that got communicated by the IOM and I think that still stands true today.

However what has happened as a result is that today there is far more awareness and many, many more grass root organizations that are rallying around to demand better and safer care.  You’re beginning to see some of that translated to include all of the health stimulus dollars and the different apps that are going around, plus funding for research.  There is a lot more funding, a lot more guidance, a lot more direction in terms of where we need to put our money to have better, safer, good quality care.

Quality needs to get embodied in the payer mechanisms.  So I think over the next decade, we will certainly see more quantification of the magnitude of errors and be shocked that it might actually be higher, because we are paying much more closer attention to it. But it will lead to much better, safer care.

Williams: I’ve been speaking today with Dr. Sanjaya Kumar, he is Co-Founder and CEO of Quantros.  Dr. Kumar, thank you so much.

Kumar: You’re welcome David.

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This is the transcript of my recent podcast interview with Dr. Scott Weingarten, CEO of Zynx Health.

David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Dr. Scott Weingarten.  He is President and CEO of Zynx Health.  Dr. Weingarten, thanks for your time today.

Dr. Scott Weingarten: Thank you very much David.

Williams: What is Zynx Health?

Weingarten: Zynx Health is a clinical decision support company that was founded almost 14 years ago.  The mission is to measurably improve the quality, safety and efficiency of health care.  Clinical decision products that are provided by Zynx Health include: evidence based order sets, plans of care, alerts, reminders, check lists, as well as reference information supporting the clinical information that is integrated into the work flow.

Zynx Health has a client base of more than 1700 hospitals in the United States that care for more than one out of two patients who are hospitalized in any given year.  Zynx Health also has a significant physician client base who use clinical decision support in the ambulatory setting and Zynx has a global client base in a number of countries outside of the United States.

Williams: There’s a lot of discussion recently about meaningful use, both coming out of the stimulus package and then with the release of the definition.  Can you tell me your perspective on meaningful use?  What is it and what’s the difference in meaningful use between physicians and hospitals?

Weingarten: The intent of meaningful use as I understand it is the federal government does not want to provide reimbursement just for installing software. What the federal government is hoping to achieve rather than just the installation of software is quality, safety and cost results that benefit all Americans or could potentially benefit all Americans.  Studies show that in order for electronic health records to bring about improvements in health care, clinical decision support is required. Therefore there are a number of criteria that have been released that provide a definition of meaningful use, which include the requirement for clinical decision support as a strategy for improving health care.

There are a number of differences related to the definition of meaningful use for hospital clients and physician office clients.  The number of differences are quite extensive and probably beyond my ability to go through them during this podcast, but one example would be that the requirements for entering orders in an electronic health record are more aggressive for physicians in their office to demonstrate meaningful use than it would be if entered by physicians in the hospital.

Williams: What role does Zynx play or will you play in helping customers achieve meaningful use?  Are your customers already achieving meaningful use just by using Zynx?

Weingarten: Zynx provides the clinical decision support that can be used at the point of care to help demonstrate meaningful use.  There are a variety of different expressions of the clinical decisions that are specifically defined in meaningful use.  For example, evidence based order sets are defined as a care goal for the demonstration of meaningful use and Zynx provides evidence based order sets both in the ambulatory setting and the hospital setting.  Zynx has a number of different products that address clinical decision support at the point of care, including care plans that are used by interdisciplinary care teams. So that’s one further way that hospitals can demonstrate meaningful use.

There is also a stage one requirement for five clinical decision support rules. Zynx has a large number of clinical decision support rules in our library to help clients select the rules that they believe will be the most helpful for patients that they care for.  And there are other parts of Zynx clinical decision support that are directly relevant to demonstrating meaningful use.

One example would be that the requirement for medication safety in the elderly. All of the order sets within Zynx products have been checked against the Dr. Mark Beers criteria that were specifically cited in the draft definition of meaningful use from July 16^th, 2009. They’ve all been checked against the Beers criteria to make sure that safe medications are being prescribed for elderly patients, at least when order sets are selected.

Williams: Since the most recent version of the definition came out, I’ve heard some complaining by providers that meaningful use is not going to be achievable or that it will be too bureaucratic to document it.  I can’t tell whether that’s just people writing stories in order to have something to talk about or if that’s for real.  Do you have a perspective on that?

Weingarten: I do.  I think what people are talking about and concerned about is that the bar has been set high. Many, many organizations will be challenged in order to demonstrate meaningful use.  It’s going to require significant effort as it relates to clinical decision support and other areas that are specifically cited in the meaningful use definition.  It’s going to be hard for hospitals and physicians to demonstrate meaningful use and I understand their concerns.

The flip side of it is that many health systems, hospitals, and physician organizations are well on their way to demonstrating meaningful use and they will demonstrate meaningful use.  Many organizations will clear the bar and receive the HITECH reimbursement. At the same time looking at the definition of meaningful use, I believe based on what’s included, it will lead to better health care, safer, more efficient, better quality health care.

So in the end –albeit difficult to achieve by many– I think the end result will be better health care for the American people.

Williams: It’s been almost a year since ARRA was passed and I’m wondering whether that has had any direct impact in terms of your product road map.

Weingarten: Well it has.  It turns out we were very fortunate that a number of criteria that were in the recent draft definition have been part of our road map for –in some cases– more than ten years.  One example: in the draft definition, they required approaches to reducing unnecessary hospitalizations, readmissions and emergency department visits.  We’ve had clinical strategies that have been defined based on the peer review literature to accomplish those goals since the late 1990′s. So we were very fortunate that we had a lot of the content already developed and already in our products that was consistent with the demonstration of meaningful use.

For example, we’ve been working on evidence based order sets since 2001. So I would say we’re certainly looking at any areas related to clinical decision support that are in the definition of meaningful use that we don’t already have, but at the same time we’re very fortunate that many of the areas had already been covered by our products for a number of years.

Williams: If I look at this from the patient perspective, what would be the impact on a patient who went to a hospital that was using Zynx compared to a hospital that was not?  Would there be anything that the patient would see that would be different? Or would there be something behind the scenes that would be different about their care?

Weingarten: It would be behind the scenes rather than anything the patient would see.

Let’s pretend that a patient is hospitalized with community acquired pneumonia and the patient is quite sick and goes into the emergency department. The patient has a fever and is short of breath and has a bad cough and can barely talk because the patient cannot breathe well. The patient is evaluated in the emergency department. Let’s use the example of an emergency department that subscribes to Zynx and has orders that would ensure the patient gets the treatment that has been shown to lead to the best outcome.

An example might be selecting the diagnostic tests that are required that have been shown to lead to the best outcome.  Some examples might be checking the oxygenation status or performing blood cultures.  Then it would also include treatments that have been shown to lead to the lowest mortality rates for that individual patient. That would include rapid administration of antibiotics and also the provision of the best antibiotics that are associated with the best outcomes, meaning the lowest mortality rates.

Then let’s say this patient is quite ill.  The patient is put on intravenous antibiotics, given oxygen and now needs to be hospitalized in the intensive care unit.  The order set and the plan of care that the patient would receive would include orders again associated with the best outcomes based on the peer reviewed literature and the guidelines that might be relevant to the individual patient.  So behind the scenes, which I do not believe the patient would recognize, the patient would be diagnosed and treated with all of the clinical decision support that would give that patient the highest probability of having the best outcomes.

That means the patient being treated quickly and having their illness resolved as quickly as possible and leaving the hospital feeling well.  So that would not be apparent to the patient.

Williams: We’ve been talking today about evidence based decision support.  I noticed on your website you also use the term “experience based decision support.”  I’m curious about what that means.

Weingarten: What that means is there are many areas where there is evidence to suggest one treatment is better than another.  So I’m going to stick with the example where the patient was hospitalized with community acquired pneumonia.  There is very good evidence on which antibiotics are more effective and which antibiotics are less effective.

There are also areas that have not been studied as well in the medical literature.  So it might be whether to do a complete blood count on admission on day one and day two for a patient with community acquired pneumonia or which specific blood test should be ordered or whether to do liver function tests on a patient with community acquired pneumonia.  So for whatever reason, either it has not been studied or maybe there is conflicting literature –one study suggesting one approach is best, another showing a different approach is best– we have the experience of more than 90,000 client customized order sets and plans of care that reside on our server.

What that means is in the aggregate, we have an opportunity to see what hospitals are actually doing.  So if we find, for example, that our client base has customized 2,000 order sets, and in areas where evidence does not exist or evidence is conflicting, the experience is that they all tend to prescribe certain blood tests, certain diagnostic tests but not others, then we use that information in the aggregate in order to inform our next generation of order sets.  Many of our order sets are on their fifteenth or twentieth evolution based on the experience of how clients are actually using our order sets and plans of care in their own organization.

Williams: When I asked you before about some of the grousing about the meaningful use definition, you talked about the bar being set relatively high.  I’ve also heard the notion that there is going to be an expectation that this meaningful use definition will evolve over time, presumably to become even more challenging.  Do you have a sense of whether that will happen and how it will happen? Is the government just going to have to lower the bar so more people can reach it?

Weingarten: You know, I don’t know whether that will happen or how it will happen, but I think that you could see there being tension both ways.  On one hand certainly you may want to lower the bar a little bit for rural hospitals or small community hospitals that may be challenged to achieve some of the criteria that are part of the meaningful use definition.  I’m not sure whether you would or you would not, but it’s certainly a discussion that is likely to be had.

On the other hand, at the same time, one goal of meaningful use is to maximize the health and improve the health care of the American people.  If that were your primary objective, you would be far less likely to lower the bar over time and I believe you would certainly consider keeping the bar high.

Williams: The way things are looking it seems as though health reform may be enacted about one year after the HITECH Act. What kind of incremental impact would health reform have on Zynx beyond what we’ve describes here with meaningful use?

Weingarten: I think it has a huge impact on Zynx.  My understanding of health care reform is that the goal is to expand access to health care and at the same time there is a lot of discussion and debate about how to pay for providing health care to additional people who may not have had access to health care in the past.

There is also a lot of discussion about rising and unsustainable increases in health care costs.  So as people think about executing whatever plan is required for delivering health care reform, I believe there will be a lot of discussion about clinical strategies to the best possible health care at the lowest cost.

As people contemplate what those strategies are, as in the case with ARRA, people are going to want strategies that have been proven to lead to excellent patient outcomes at the lowest cost, or evidence based strategies rather than opinion based.

I believe at least the demand for evidence based health care and evidence based clinical decision support will increase significantly as organizations –whether it’s the federal government, state government, hospitals, health systems, physician organizations and all health care providers– try to implement whatever comes out of health care reform and they try to increase access to care, provide high quality, safe care at an affordable cost.

Williams: I’ve been speaking with Dr. Scott Weingarten.  He is co-founder, President, and CEO of Zynx Health.  Dr. Weingarten, thanks very much for your time today.

Weingarten: Thank you very much David.

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This is the transcript of part 2 of my podcast with Humedica CEO Michael Weintraub and VP Corporate Development/Marketing Allen Kamer. You can read part 1 here.

David Williams: I know Anceta has been in the works for a while, and that they’ve made some progress, but perhaps have struggled a bit. Why did they want to work with you, what did you offer that they were unable to do on their own?

Michael Weintraub: They have been working on this for a while, because from a leadership perspective, they were early. They were on this topic for five years or so, because many of the opinion leaders in health care are AMGA member organizations. They’ve been expert at the application of information to drive efficiency and effectiveness, but it’s not something that all 330 of their organizations do equally, because it’s a pretty significant investment from a portability perspective. Importantly, they’re all about collaboration; they have disease-focused collaboratives that they run all the time. They just had a hypertension collaborative, they are rolling out a diabetes collaborative, which is our first disease area for them.

When they talked to us, it was clear that we had a very common mission and vision.  Some large organizations are trying to stretch to do this, but it’s a very significant investment. Hence we raised $30 million in 2008 from three Blue Chip venture capital firms in the Boston area, Bain Ventures, Northbridge Venture Capital and General Catalyst, organizations I’ve known with or who have funded previous companies of mine.  Leerink Swann, where we spent some time hatching and incubating this idea, is also an investor.  What Anceta and AMGA saw in us is a pure play – an organization whose sole mission was 100 percent aligned with their objective, as opposed to something that was a stretch or another division.

Williams: How does what you do relate to recent Federal policy moves? I’m thinking particularly about ARRA/HITECH as it relates to meaningful use, Regional Extension Centers that will be funded starting next month, and then maybe also comparative effectiveness.

Allen Kamer: We are exploring a variety of grant opportunities right now, related to the comparative effectiveness research, and with our partners, both BBN Technologies and Anceta, as well as some of the participating medical groups from the AMGA.  We will explore and seek grants from the comparative effectiveness research activities that are ongoing.

Williams: Do you expect, with meaningful use and the greater use of electronic health records, that you’re going to be able to broaden your database, or does Anceta pretty much give you what you need?

Kamer: We definitely see the onboarding of electronic health records as a good thing overall. With the laying of the piping we believe the data that flows through it will be highly valuable. We will be the faucet that can bring it out and deliver the true value of the investment. We are very busy and focused with Anceta and AMGA members right now, but ultimately over time, we think EHR adoption will benefit us and others in the industry.

Weintraub: Anceta and AMGA is certainly a strategic partner and collaborator of ours.  Having said that, we’re focused on the health care market and the provider market at large.  The fact that Anceta has such coverage is very significant.  The other important thing to note is that EMR penetration in the provider world is roughly 20 percent.  We can have an interesting debate as to what the usage percentage is versus the penetration rate, meaning purchase decisions, but it’s roughly 20 percent.  It is significantly higher than it was five years ago.  There are all kinds of forecasts on what that percentage will be five years from now, but it’s really a bi-modal curve.

AMGA members have a 90 percent EMR penetration rate, because they’re typically medical groups with 100, 250, 1000, 2000 doctors.  If you take a look at small medical groups, 50 doctors and smaller, it’s actually a very small single digit EMR penetration rate.  We’re focused on where EMRs have been implemented, or are being implemented.  Similarly, on the hospital side, there are roughly 5,000 plus hospitals in this country, and roughly 3,000 of those 5,000 are part of a chain, a larger aggregation of hospitals, ranging from small hospital chains to very large 100-150 hospital chains.  We’re focused initially on collaborating with hospital systems, because from a leverage perspective, they typically have a common EMR or two, not always, but it’s not about 100 hospital and 100 EMRs, so there’s some technology interface leverage and data acquisition leverage for us.

We’re focused on the top 25 to 50 hospital chains in this country as our initial buyers as evidenced by the first few we’ve done business with, and eventually we’ll talk to individual hospitals as well. But for us to get the initial heft that we’re looking for and accumulating data so that we can have a census-like view of health care we’re focused on specific regions and hospital systems in those regions. So it’s not just Anceta. It’s Anceta as the key ambulatory partner, and integrated delivery networks, and many of the large hospital systems out there.

Williams: It’s interesting to hear the degree of involvement on the provider side. I would have guessed that there was more balance at the outset between the customer types. I know you mentioned that you’re 100 percent aligned with AMGA or Anceta, but when I heard the description of Minedshare, it sounded to me as though it could also position you longer term to be more of an arms dealer.

With the benchmarking comparisons within and among hospitals, that same kind of information going to health plans or other payers might set off a bit of a race that would lead the benchmark levels to have to rise in order for the providers to stay in business.

Weintraub: That’s a great point.  By the way, on your earlier point about balance between markets, did you mean outside of the provider market?

Williams: That’s what I meant, yes. I meant different customer types.

Weintraub: A quick note on that before I shift to your payer point. We’re focused on the providers 100 percent because that’s where the data lives, and without the data, there is nothing else we can do with any of the other markets. We know that having valuable capabilities and assets that motivate the providers to do business with us and bringing meaningful value back to them is the only way to have long-term sustainability of the supply chain, and that is absolutely near and dear to our hearts.

We certainly intend to broaden, starting in 2010, and start doing work with the life sciences market once we have volumes of data that are large enough to allow for the analysis that matters to them in a deidentified HIPAA compliant way.  So it’s a staging issue. We happen to be a point in time where we are heavily provider focused. We will always be incredibly focused on providers because they are the foundation for this business through the perspective of the asset formation required to claim the other markets.  Relative to the other markets, we’re certainly moving into the government, as well as financial services and life sciences in 2010, and we started hiring leadership and capacity and capability with that in mind, and have started talking to those early customers, as we speak.

Relative to payers, however –a market I know quite well from my PharMetrics days and my MedStat days– I talked to several large payers over the past 6-12 months and I validated a couple of things:  number one is they’d love to get their hands on this information, and they find it to be incredibly valuable; number two is that they know me well enough as a colleague that they also agreed that if they were me, they wouldn’t do that right now.  We can put up all kinds of technology and process safeguards in place with respect to the granularity of the data we share –and we are not in the business of sharing information that names names. I don’t mean just HIPAA, that’s obvious, but I mean providers, perception becomes reality. And it becomes emotional.

And since payers negotiate with providers for rates and economics, I don’t think we can be on the leading edge of blazing that trail. My strategic belief is that over time the kind of information that we have will form the basis for dialogue and communication amongst those stakeholders, and at that point, I’m ready, willing and able to be that invaluable asset that allows them to open talks at a fact-based level. But I don’t want my providers, for a moment, worrying as to whether we’re the arms dealer arming the payers when it’s time for rate negotiations.  So while it’s a very fertile market, we need to be true to our mission and watch the evolving stages of the broader macro-economic health care market.

I just don’t feel we can go there right now. We’re looking to create a trusted brand with the providers, and we’re looking to monetize that data, in safe, secure, de-identified HIPPA-compliant ways in other markets.  I do think the payer market represents a third rail that is not worth getting into at this moment in time.  But do I believe that it’s an agenda that will change over time, not because I drive it, but because the health care industry will drive it?  I do.  And we’ll be watching and following that closely.

Williams: What’s the role, if any, for personal health records?  I’m hearing certainly data is coming from electronic health records, and that may have most of the same data.  But is there a role for patient-generated information, or information that extends beyond the traditional electronic health record boundary?

Weintraub: There is a role for that information.  We keep getting more and more inquiries regarding a variety of opportunities, such as for clinical trials. And the list goes on. Those are all on the list, but from an entrepreneurial perspective, and optimal allocation of capital, we want to pick three things and do them really well before we take on the next three. So time is our friend here. We’ll have more assets, more data, more capabilities, and then we’ll consider those other opportunities under other markets. But I don’t want to boil the ocean, and be a mile wide and an inch deep in the formative years, so we’re really focusing on the main thing is the main thing.

Williams: What might things look like in say five to seven years if you achieve your growth plan?  How big of a company are we talking about?  What kind of an impact?  I know it’s probably hard to say exactly what areas you’ll be in beyond the ones we’ve talked about, but what’s the vision for that time horizon?

Weintraub: You’ve been talking to my investors, haven’t you?

Williams: I know some of them, but no, have not talked about this!

Weintraub: Well, obviously it’s a small matter of execution. But what’s our business plan?  Our business plan is to build a formidable data asset. Whether that data asset is 50 million lives, 35 million lives, 100 million lives, depends on that small matter of execution. But for us to have the kind of impact we would like to have, we would like to have a database that is geographically and demographically representative of the U.S. Census, broadly speaking, and we used the number of 50 million lives.

It doesn’t mean we’re going to stop there, because the more data you have, the more you can slice it while maintaining the kind of statistical anonymity that you want to maintain.  We would like to have a database that is significant enough that we can (a) analyze the top 60 to 100 diseases with confidence, whatever life sciences market across all disease and therapeutic areas across multiple treatment settings, and we would like to be in as many, if not all, the major hospital systems and chains out there, who have one of the top 5 EMRs.

We would like to be in a large number of AMGA and Anceta sites, as well, contributing to that population, and we would like the data asset to be a sought-after clinical information resource by the Federal government. We’d like some of the other markets that we’re not yet talking to or considering in the areas of consumer driven health and other areas to really be on the corporate development short-list for us of things we’re thinking about.  We’d like to be the leader in clinical informatics and the de facto leader in a market that we think is moving at a rate that is absolutely supportive of our goals: evidenced-based health care, clinical effectiveness, meaningful use, all of those terms are accelerating.

We think there’s going to be a little bit of what I’ll call a ‘wait and hurry up’, as opposed to a ‘hurry up and wait.’  We’re seeing a lot of organizations now worrying about getting basic plumbing decisions in place, and in some cases, taking advantage of legislation and the stimulus money to make decisions to switch to longer term EMR decisions.

Clearly, the plumbing has to be in place for us to then take advantage of the information flowing through.  We’re focused, we’re aggressive, but we recognize that it’s a long-term game. We’d like to be working with each of the top five EMRs on the inpatient side and on the outpatient side, that occupy well north of 50 percent market share, and providing invaluable information and analytic resources to those sites that use those EMRs as a complementary tool to them.

You’ll be seeing more news from us in the coming months. I think you’ve seen us note the various partnerships we’ve formed with Anceta and AMGA, Leerink Swan, BBN.  We’ve just launched a scientific advisory board with some phenomenal members that we’re proud and privileged to have as part of our organization, and we’ll be kicking off that focus, as well, to get their guidance and expert advice moving forward.

We look forward to keeping you posted as we move forward.

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This is the transcript of part 1 of my podcast with Humedica CEO Michael Weintraub and VP Corporate Development/Marketing Allen Kamer.

David Williams: What is the focus of the company? What are you bringing to the market that has not been available in the past?

Michael Weintraub: We’re aiming to build a census view of health care in America.  What I mean by that is to build a large-scale informatics asset that various constituents can tap into to get a perspective on whatever question they might have, whether it’s a disease or a therapeutic area. The focus will vary depending on whether you’re a hospital, a large medical practice, a pharmaceutical manufacturer, biotech, the federal government, etc.

We’re basically building a large-scale factory that is bringing in a vast amount of patient data from the provider setting.  By the provider setting I mean hospitals, integrated delivery networks (which include large ambulatory settings and doctors offices), standalone doctors’ practices, and then putting all that information into a common database. It’s protected by world-class security and adheres to the principles of HIPAA. The organizations that treat those patients can certainly see their specific information at a detailed and granular level, but other than that, everything else is done at an aggregate, encrypted, unidentified level.

We’re not studying the individual or the hospital or doctor per se, we’re studying patterns and analyzing the information and the various cohorts to understand meaningful variation; really studying that information to drive value and performance improvement.  At my last company PharMetrics, we did this with insurance data. That information provides you with a view but it’s aggregated and it’s not at the granular level that we’re talking about here.  So the state of the art today –with the big push by Obama and the federal stimulus dollars and the Health Care Recovery act– is electronic medical records capability. As the level of automation increases our aims becomes possible. We are working with organizations that have electronic medical records and we are bringing that information into our common factory, then applying scientific, statistical and medical techniques to normalize that information so it can be used in the manner I’ve just described.

We have multiple markets.  We have provider markets and we have built some exciting applications (which I’ll have some of my colleagues here talk about in a moment) on their behalf that enable the exchange of information. Data comes to us and then we provide/sell those capabilities to our customers.  We have other stakeholders in the health care industry who are very interested in understanding how their products are utilized, whether it be a biotech company, a top pharma company or a medical device company. Those organizations (and we’ll comment on that deeper in a minute) are very interested in studying large volumes of patients that might have asthma or type two diabetes and so forth.  So having a business intelligence view, a very specific kaleidoscope into a population of interest is really now at a level of clinical specificity that has not been available before, unless one conducts primary market research.

Williams: What is the time lag of the data? It sounds like you’re using the information for aggregated views –which are perhaps not so time sensitive—but also providing information back to providers on an identified basis to improve treatment. Have I got that right?

Weintraub: The state of the art has been less clinical specificity, but also data is often batched or historical.  When we implement this capability, we grab several years of retrospective data, but we also have designed our capabilities such that our information is streaming in near real time, in five-minute increments. If you’re a provider, you’re able not only to see your history, but you’re also able to study the population while they’re actually in your care. So it’s got a direct link to your electronic medical records.  It’s streaming continuously, so if you’re a hospital looking to study preventable complications that would be an obvious application.

Williams: If you’re a hospital, beyond studying it, could you also be using information for real time clinical decision support or would that be beyond the scope?

Weintraub: That’s a great question.  I think there is a fine line here. Absolutely it’s going to be utilized for real time clinical support.  What we don’t want to be is the real time patient management system for a variety of reasons.  But if you’re a large provider with a significant cardiology unit, you’re going to have an individual from a quality department with a quality nurse assigned to that unit and what has typically been done through silos of information with multiple EMR’s and lots of paperwork and checklists and highlighters can now be done online on a real time basis.

Williams: Tell me about your product offering.

Allen Kamer: We have built two products and have launched one of them. The first product is called “Humedica Minedshare.” We compare performance data and benchmark activities from one hospital or medical group to an aggregate or to others within their system.  So for example, a medical group with multiple clinics can identify on a clinic-by-clinic basis how they’re doing in treating certain patient groups and then look at overall how their organization does and then go into a greater level of detail.  Additionally, we are building the capability for that particular medical group to compare with all the other medical groups that are participating.

So that’s called Minedshare. It enables clinical analytics where you can benchmark and compare treatment of patients by disease and severity across locations.

Weintraub: If you’re a 25 or 50 or 100-hospital chain or system, you’ll likely want to utilize this for comparisons, inter-hospital as well as intra-hospital, because you have lots of hospitals in your system.  You also might want to analyze hospitals to the norms within their region because many hospital chains are structured by region. And then at a third level, as our database grows, you’ll want to analyze performance compared to the benchmark within our broader and ever growing database and based on region, specialty type and so forth.

It’s all about discovering variation; often variation and acting on variation is at the heart of both clinical effectiveness and operational efficiency.  The endocrinology department might want to look at average clinical information –like HbA1c scores for the diabetic population by physician– and be aware of the differences demographically or geographically rather than by overall population. Within the practices they can then try to understand attribution and cause so that they can attack it.

That product has been rolled out and is in use by our first customer Christus, a 20-hospital system in Texas. They are an active user of that product.

Kamer: Our second product is called: “Humedica Minedstream.” This a real-time and predictive clinical surveillance tool that has been developed for the hospital to reduce preventable complications and improve performance metrics and really ensure that appropriate compliance is maintained with the performance protocols.

At Humedica we gather, map and normalize the data as patients are admitted into the hospital and tests are given. We use our advanced predictive analytic capabilities and modeling techniques to identify the hospital patients that might be at risk for preventable complication or might require tracking due to the Join Commission’s core measure criteria.  The Minedstream product is a dashboard that allows you to track patients. A quality nurse can identify who they are and where they are in the hospital and the physicians whose care they’re under.

It lays out all of the requirements associated with delivering care to those patients and it has a count down mechanism and dashboard tool to ensure that those activities are being adhered to. For example, it a patient comes in with chest pains and then has testing done, we identify that those patients may be heart attack patients. Then there are a number of things that need to happen for a patient who has had a heart attack, such as aspirin needs to be given within 24 hours if their troponin is at a certain level.

There are things that need to be done at discharge so our dashboard first identifies these patients and then tracks whether or not the physician or the nurse has performed those activities that are required for those patients.

Weintraub: Our first product rolled out earlier this fall and the second product is being rolled out this month.  Those are all for the inpatient hospital settings.  The complementary applications which will leverage the same environment, the same product, the same data factory, the same scientific methods, but for the ambulatory market, will roll out in 2010.

The ambulatory market is very important to us. Much of health care spending is on the ambulatory side. Roughly three of four dollars of prescription drug spending is on the ambulatory side. It’s a heavily growing market due to chronic disease. We have established a long-term, exclusive partnership with the American Medical Group Association (AMGA).  They are a very prestigious organization in the D.C./Virginia area and are the gateway organization that is the connection to over 300 large medical groups, integrated networks in this country.

They provide care to one in four Americans.  They are in 49 states and touch about 100 million patients a year and several hundred thousand physicians. It’s a very important organization, which includes prestigious organizations you’ve heard named by Obama such as Kaiser, Cleveland Clinic, Intermountain, Mayo, Geisinger, Henry Ford and others. We are their exclusive partner in a clinical informatics capability to address the very issues we’ve been talking about for the past 15 or so minutes.

We are working with roughly ten of their organizations who are early adopters to roll out this capability in the spring of 2010 to the ambulatory market.  What’s really important is to be working with hospitals and medical groups so that we can connect patients longitudinally and get an integrated longitudinal view of health care across treatment settings.

Continued to Part 2.

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This is the transcript of my recent podcast interview with the CEO of Doctations, Dr. Louis Cornacchia.

David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Dr. Louis Cornacchia, CEO and President of Doctations.  Dr. Cornacchia, thanks for your time today.

Dr. Louis Cornacchia: You’re welcome.

Williams: Tell me about Doctations.  What is it?

Dr. Cornacchia: Doctations is a software system.  It’s a suite of Google Apps-like applications using a standard web browser for doctors and their patients.  It contains the entire suite of functionalities that are found in any EMR/EHR and billing software.  Also it’s tied directly to web applications for patients, allowing  them to share space or Internet space with doctors in real time.

Williams: How would this be different from a typical application that might be set up in a physicians office?  Is it mainly the patient portal piece of it that makes it different?

Dr. Cornacchia: No, it’s the difference between having an intraoffice phone system versus a phone system that connects to the rest of the world.  It’s an Internet based system so it allows for clinical interactions, business interactions between physicians and both clinical and supportive interactions between doctors offices and patients.  So it’s really a whole new approach.  This isn’t an in-office client/server system.  This is a true network-based system that people can log onto today for free and actually start using a lot of the functionality without even paying a penny.

As physicians have gone on to do that, many have actually called and begun paying us a subscription fee per month specifically to gain the ability to add additional functionality to the software.  We have over twodozen partners that provide services such as real-time voice recognition and back end voice recognition tied to transcription. They’re all listed on our website.

These are all available because they are web services provided by corporations specializing in their specific niches and providing services to doctors to improve the workflow within the office, improve cashflow, and improve the ability for the physician to take care of their patients. For example, on the scheduling side, there is the ability to tie into a web service that allows for automated phone reminders to patients 48 hours before an office visit.  There is really nothing for a physician or an office staff to do other than schedule the patient and the phone calls are automated.  So as a true Internet creature the Doctations system can take advantage of all these basic Internet web services that have been available to the big guys for years and make them available to small offices or big offices alike.  It doesn’t make a difference.

Williams: How does this change the practice of medicine from the standpoint of the patient or the physician?  What are the sorts of things that can be enabled when somebody pulls all these web services together?

Dr. Cornacchia: Well that’s just the beginning. I don’t know if you’re familiar with what’s going on with Health 2.0.  We’re in the very early stages of forming companies based on web services for patients, services that will define whether or not a new symptom of a patient is related to a new medication they started, for example.  We’re seeing a large number of web 2.0 web services that are coming to us and asking to partner with us so they can provide services directly to patients through the same network system we’re using to help patients connect directly to the doctors.

Williams: As you say, we’re still at the early part of this. What are you seeing in terms of the typical profiles of your users?  What are they like?

Dr. Cornacchia: There is no typical profile.  That’s the most unusual part of this.  It isn’t as if it’s all 25 year old women or 35 year old men.  We see a full spectrum of people from the teens all the way up to the 70′s and 80′s using this.  It’s surprising to me because I actually expected that it would be more of the younger crowd who grew up with computers like we did.

I think that what’s happened is that the Internet world has just made it so clear to everyone, even those who are older than we are, that in fact the conveniences of using the web are so great that it’s worth the effort. The result is that you end up with services that are provided more efficiently and therefore more cost effectively than through standard bricks and mortar approaches.

Williams: Is there a benefits for a Doctations user if they want to interact with another physician that is also Doctations user?

Dr. Cornacchia: Well David, yes.  Just think of the implications of having a free version of the software available to everyone. Now collaboration can occur between doctors and referring physicians without the physician having to be a paying member.  But then what happens is the non-paying physician looks at the system and begins to realize it’s a full-fledged comprehensive system with task management and integrated billing. They can look at their own billing in real time and then interface with medical billers in their office or outsource. They begin to realize it’s a fully certified system that’s as good as any system they’ve ever seen.  It’s better because now it’s truly an Internet creature and so they end up with the best of both worlds.  So most doctors are saying: I’m coming with you.  We’ve had a lot of doctors moving in our direction just because doctors who are collaborating with doctors who are using our system suddenly realize this is a great way to go.

Williams: Obviously a lot of attention is being paid at the Federal level to the concept of meaningful use as part of the stimulus package and health care reform.  How does the stimulus package tie into what you’re doing at Doctations?

Dr. Cornacchia: We invented meaningful use ten years ago.  I’m a physician and I went to this not to become another EMR vendor, but to fix problems. As a physician and as somebody who has experienced health care from the patient’s side rather intimately, I can tell you very clearly that having a client/server system is a shadow of what an Internet based system can do.  So in meaningful use, it’s all about how can you achieve health care efficiencies without creating more work and at the same time building quality.  It actually turns out that it’s a common denominator for both, so building an Internet based system solves both problems. Meaningful use basically means an Internet based system.

Taking client/server systems that are in every office and tying them together is ultimately not a satisfactory answer because there are problems of synchronization. Unless each office is continually connected and continuously synchronized with some central database, there is a remote potential that there could be miss synchronization resulting in inappropriate or incorrect or incomplete information being looked at by a single physician.

It could result in a death because the wrong medication was prescribed and doctors didn’t know another medication was prescribed five hours earlier and had never been synchronized with the central system.  That approach has failed and I think that people are beginning to realize that that’s just not going to work.  In fact, what we visualized in 2001 and 2002 as the only real answer to these problems was right on.  It has to be Internet based.

I know a lot of people have put a lot of work into client/server systems and I think that there is a way to incorporate such systems into this type of a network, but I think that it requires that certain central repositories of data become integrated at the code level. I don’t think it requires a tremendous amount of work but for the most part what we’re going to see is a migration into Internet systems in order to achieve true meaningful use, simply because the cost efficiencies of providing services to Internet architectures like Google apps and like Doctations are just so much more cost effective, so much less expensive. That alone is a decision maker, but then when you look at all the connectivity and collaboration and other options that then become available at the Internet level, there is just no other choice.

Williams: If a Doctations patient is in the hospital, are you able to have collaboration between the hospital and the ambulatory physicians or is that harder than doing it among ambulatory physicians?

Dr. Cornacchia: Connecting to hospital-based systems using collaborative-based modern technology built on a .net backbone is actually straightforward.  The cost of integrating systems like these are actually remarkably low.  The only variable that can’t be accounted for is the bureaucracy associated with achieving agreement to connect between the vendors and on behalf of the particular facility or hospital.  That’s the only unknown variable.

The actual technology costs of connecting these systems is almost trivial. You end up connecting to a whole backbone of people so the cost of connections in a cloud based system just makes it a much more viable option as opposed to trying to connect each and every client/server based system to a hospital system.  So there is the advantage of numbers.  On top of that, there is the reality that our interface is available as an add-on to an existing hospital system so that they can simply link it directly to the various portions of their hospital system and make our collaborative technology immediately available.

Williams: There are some other companies that have gotten on the Internet health care band wagon.  Maybe I’ll ask you to contrast yourself with a couple of those that are fairly prominent.  One is Practice Fusion that focuses on the EMR side and another is American Well that’s more focused on the clinical interactions.  How do you fit in with them?

Dr. Cornacchia: I think they’re both great companies and I think that they’re thinking in a similar direction and I think that’s great.  The more people moving in this direction the better.  I think that the EMR system in Practice Fusion is a good start.  I think that it’s a good basic SOAP based system.  Most physicians are familiar with and it’s reasonable.  I think that they have not gone through the certification process, in fact they have ridiculed it, which I think is wrong.

We went through the certification process and as a physician trying to achieve a vision it was a painful process because there are a lot of hoops you have to jump through to make that work.  In conclusion, they’re not inappropriate hoops.  They were hoops that are actually required for complicated workloads that are found in doctors’ offices and other clinical settings.  So what’s present in the certification project is actually laudable.  It’s very well thought out and I don’t think it’s biased at all. It’s a very well thought out set of requirements and I think it’s unwise to challenge that.  I think it’s unwise to contradict that whether or not there are vendors involved.

I know all the rest of the issues.  I don’t see it.  I don’t really believe that.  I think things probably happen that we don’t know about of course, but for the most part what we saw was legitimate requirements and criteria for a system that has to live in a very complex world for doctors and patients.

American Well deals with communications. If you take a communications system and it just exists out in its own place, separate from the actual software system used to run the office, both clinical processes and billing processes, it becomes a non-integrated separate process. We originally thought about moving in that direction, but what’s really required is one comprehensive Internet based system that then gets expanded and becomes the foundation for communications and collaborations.

There’s no reason why there should be one EMR approach, probably multiple EMR approaches.  So what we’ve built is a software platform for Internet health care that we make available to government agencies and universities at the source code level.

So the answer to your question is that they are both excellent companies and I think that they’re both moving the entire industry forward. They both have a lot to contribute and I think that they’re very much along the lines of functionalities that exist already in Doctations.

Williams: I’ve been speaking today with Dr. Louis Cornacchia.  He is President and CEO of Doctations.  Thank you very much for your time today.

Dr. Cornacchia: You’re welcome.  You’re very welcome.

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This is a transcript of my recent podcast interview with Prem Urali, CEO of HealthUnity.

David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today to Prem Urali, who is CEO and co-founder of HealthUnity.  Prem, thanks for being with me today.

Prem Urali: Thank you David for having me.

Williams: What is HealthUnity?

Urali: HealthUnity is a five-year-old, successful health information technology company.  We are solely focused on the health information exchange market.  We offer what we believe to be the most comprehensive standards based product for building health information exchanges. We target pretty much all the various segments of the HIE market namely: hospital outreach by exchanges, IDNs looking for solutions within the IDN or reaching out to the community.  We also do local and regional exchanges leading up to statewide exchanges.  Also we help companies plug into the nationwide health information standards.

Williams: In order to be able to do that, what are the main services or products that you offer?

Urali: The approach we took to the solution to this fairly wide set of problems is what we believe to be a fully integrated product.  To be able to do a fully integrated product that offers an HIE solution for the various market segments, we believe that there are three major technical components that are needed.  The first is infrastructure services.  These are things like: how do you manage the exchange, how to you manage the various nodes on the exchange, how do you manage the users, the master patient index certificate of authority and how you get data into the exchange; what people commonly refer to as adaptive services.  All of this falls under the bracket of what we call infrastructure.

Second are the real services that people care about, which we call clinical services. These are things like results delivery, record location, clinical summary access, providing access for the patients to their own data, providing lab results that need to be reported to aid the local, state, or federal public health to the authorities.  So these sorts of clinical services are the second bracket of services.

Then the third one is what we call gateway services.  These are pre-established or already existing services out on the Internet that need to be connected.  An example of that would be somebody who can connect to the Surecripts network or the RxHub medication history services. These sorts of things fall under the category of gateway services.  So in some ways there are basically three types of things that we do.  The first one being infrastructure services, the second one the clinical use cases and the services needed to do that and the third one being the gateway services.  We offer solutions across the three of them enabling our customers to realize the visions of HIE’s.

Williams: A lot of what I hear out in the market is about how there isn’t a lot of interconnection and how there aren’t a lot of standards and everybody exists in a silo.  The way you’re describing it sounds like you’re offering the capability to bridge all of those gaps.  Where are we in the lifecycle here?  Is it very uncommon that people have the sort of services that you’re describing or is it in fact more widespread than is generally recognized?

Urali: The cycle that we are seeing in the industry, it is still evolving.  We believe there is a lot of positive movement towards standardization at various levels and it’s a very complex problem we’ve been working on for the last five years and we continually invest in it.  So we think they are converging. We believe with the establishment of meaningful use in the next few weeks that potentially by the early part of next year it’s going to be become much more clear as to what will be expected, in what time frame and how to go about doing it in terms of standards and in terms of really achieving profitability. Hence we believe that companies that are strongly focused on R&D and can deliver a good solution at a reasonable price in the time frame that it needs to be done will be successful in serving the market need that comes about.

Williams: At first you were talking about three different segments that you’re serving, between the hospitals doing outreach, between the IDN’s, and the third one the local and regional and eventually the statewide networks.  Those are probably more of the RHIOs that people used to talk about. But you don’t hear that term very much now.  In fact a whole bunch of them have fallen by the wayside.  Do you have a perspective on that market and how it will tie into the stimulus act and the health reform that may or may not come?

Urali: Simply speaking about RHIOs and local exchanges, regional and statewide exchanges, we believe that there is much more momentum behind them especially because of the stimulus bill.  One of the provisions in there requires state designated entities.  We think that’s going to give a much-needed impetus to those types of exchanges and be more prevalent.  We also think if done right that could actually save money for entities.

Let me put it in a different way.  If providers are looking to meet meaningful use criteria, they need to be doing some sort of health information exchange.  That could be done in a cost effective manner by forming these local groups or statewide groups that can have better leverage and can kind of distribute the costs, the infrastructure costs, especially across them and if it is done right it could actually be saving them money and it could be a much more effective way to getting meaningful use criteria met.

Williams: What about people that aren’t waiting for that, but your existing client base that would be more on the hospital outreach side or the IDN side? What’s the cost like for them?  I know you mentioned there are the three different types of services, so I’m not sure how you break it out, but how do they think about what the cost is and what is it based on?

Urali: When we talk to customers, they are usually surprised in a pleasant sense about how much it costs to be able to do an exchange or get the initial part of the exchange going.  Since we built pretty much all of the technology needed on the exchange side of things ourselves, we can offer an initial exchange that does one or two clinical services and then potentially a model for the infrastructure at a very low cost and in a rapid time frame.  We have done initial implementations at the $50,000 range for example or in some cases even less than that.  It can be done in a 30 to 60 day time frame. I’m talking purely about the technical part of the implementation.  There are always several things that need to happen before that; who are the entities and what are they going to exchange, who are the clinical services and what is the government and the legal agreement under which such an exchange could happen?  Once that’s in place, the technical part can move really quickly.

Williams: Tell me a little bit about places that you’ve deployed.  What does the system look like there and what is the experience like for physicians and patients in that kind of a set up?

Urali: So I can address that by probably giving you a couple of examples, one of which is an exchange that we jointly built and are currently operating with a large health care system in Baltimore, Maryland.  It’s a group by the name of LifeBridge Health.  They run two hospitals.  They wanted to incorporate and exchange data with a neighboring health system.  We built an exchange that has several use cases that are operating in that exchange environment, but basically would like to exchange that with a service we call clinical summary exchange.

These two systems use two different health IT, EHR environments.  One of them uses McKesson, the other one uses Meditech EHR, and between these two we have completely automated clinical summary, so as patients that are commonly shared between these two go from one facility to the other.  There is a clinical summary that gets automatically exchanged and that summary is available within the EHR environment.  We are seeing about 40 to 50 patients benefit by the summary exchange every day.

Another example of more of the regional effort is our customer in Long Island, New York where we have a network that was initiated by the New York Stony Brook Hospital system.  Four hospitals got together and several other physicians that are affiliated with these four hospitals.  Together they have formed an exchange and in that particular instance, we have several use cases that we are deploying.  We have already deployed one of them and we are in the process of deploying several others including patient access as an example.

Williams: So why was it in the Long Island example that they decided that they needed this?  Can you tell me a little bit more about the use cases that they have in mind?

Urali: Sure.  The use cases that they have in mind are pretty much what we are also hearing from many of our other customers as well as potential customers.  These are things like clinical summary exchange, core location servers, patient access, lab results delivery, and so on and so forth.  So these are being rolled out over a period of time and across different entities.  They decided on these use cases because they are something that had an inherent need.  Now with the meaningful use definition calling for many of these same use cases, it’s become much more imperative and also there is a time element to it.  They have certain deadlines that they would like to meet in order to be compliant with the meaningful use requirements coming down the pike.

Williams: What are the other companies or approaches that you compete with?  So if I’m a hospital and I’m looking to deploy the sort of services that you have, what are the other sort of things that I might look at?

Urali: We like to think of ourselves as being in a unique situation and I’m sure when customers go out there and look for a solution there are probably anywhere from four and maybe up to ten choices that they may look at.  The approach that we have taken is much more of an integrated approach.  We were founded around the premise of building the HIE solution in the market.  Right from day one that was our charter and it’s been nearly five years that we’ve been at this particular problem and we believe we have a very integrated solution.  That we believe reduces cost as it does coverage limitation.  The other fact is that only companies that can invest in R&D on a fairly consistent basis would be able to help customers meet the meaningful use requirements in the time and manner that they will be expecting to meet those.  So I know that there are other choices as well, but probably not as integrated. When they look at the total cost ownership as well as when they look at the time to market, they will probably find us as a more attractive solution.

Williams: You mentioned your ability to invest in R&D.  Can you tell me a little bit about how the company is funded and why you’re able to make those investments?

Urali: Sure.  We have bought private investors and professional investors and the way we started the company and the way we organically grew the company, we really didn’t need a lot of external capital coming in, but at the same time the option for us arose to raise some capital so we can grow faster and things like that.  We have actually done that on and off on a continual basis.  We are a profitable, successful company.  In the future we don’t exclude bringing in additional investors so we can actually grow faster and potentially play a significant role as the market grows in the next several months.

Williams: As the spending steps up with this federal money coming, in particular, do you expect that it will make sense to be a standalone HIE company or will it make sense to bundle what you’re doing with a broader array of products or services if you’re to look maybe three or four years out?

Urali: As it is we partner with several companies, some of whom are significant players in the health IT market.  We believe that customers look for an integrated solution.  There is not one company that’s going to provide the entire suite of solutions. So we do those kinds of partnerships. For example we are close partners with Microsoft on various solutions that they are bringing to market.  We are also partners with other EHR vendors to help them bridge the gap between what they provide and what meaningful use is calling for.  Essentially meaningful use requires a lot of HIE functionality and so they find it much more attractive to work with us because they can bridge the gap that their customers are looking to do in a much more rapid manner.  So we do believe that the partnership model is the way to go.  That will benefit our customers in the time and manner in which they would like to see the benefits accrue.

Williams: Great.  Well Prem, those are the main questions that I have.  Are there other topics that you would like to discuss today?

Urali: No, I think we covered all of the important topics on health information exchanges.  I really appreciate the opportunity to be able to talk to you and we look forward to staying in touch.

Williams: Great.  So thank you very much.

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This is a transcript of Part II of my podcast interview with Dr. Paul Grundy. You may want to read Part I first.

David Williams: Have you seen patient-centered medical home principles being translated into practice in this country?

Dr. Paul Grundy: We see examples that are working all over the country and they’re working really well.  Just two days ago the group out in Seattle, the Seattle Group Cooperative released their study after one year. What they showed is that better upstream care, i.e. better care coordination, better care integration, better prevention, better communication results in lower downstream costs, i.e. if you have access for your patients to e-mail you, to call you, to see you after hours, to have some sort of flexibility built into your schedule so that you’re actually centered on your patients needs, they don’t show up in the emergency room as often.  In fact, the data out of Seattle and I think I sent you these exact numbers so you could use those, but the data we sent out of Seattle I think resulted in about a 20% reduction in ER visits.  I think it’s about an 11% reduction in hospitalization.  People will say that’s true in Seattle and that’s a big group, but we have examples of others who have done that all over the country in small practices.  I have visited over 110 now that show very consistent and similar results.  A pediatrician in Florida has about 40% Medicaid and uninsured patients, so it’s a relatively less affluent community.  He has a pretty high rate of asthma statistically in his population as a pediatrician.  He used to average about one patient a week that was hospitalized with asthma; pretty normal when I talk to pediatricians who take care of this population.  He has gone 20 months now in which he’s had only one single patient hospitalized.  That’s it.

Williams: That’s great.

Grundy: Why?  He empowers his patients and his patients are watched.  I’ve been in his office.  They e-mail him and he says: “Well just double your dose on that.”  He begins to empower them on their responsibility for their disease.  He begins to give them a sense of control of management, of coordination.  His staff works really closely with him, so he’s got care coordinators that are engaged in doing this.  Surprise, surprise!  You pay a little attention to details and you help your patients manage their own condition better and they don’t wind of up in the hospital as often.  So carry that ten years down the road, which is how Denmark now looks.  They’ve gone from having 155 acute care hospitals to a little less than 50 today and they’re probably going to flatten out at about 25.  Asthma is an extremely rare event to result in a hospitalization.

Williams: Right.

Grundy: It’s a condition that’s now taken care of by and large with better communication in the outpatient environment and in the home.  No different then when you come back to the United States and you look at places like Geisinger.  We’ve seen a 48% reduction in rehospitalization, a 20% reduction in hospitalization for chronic diseases.  Same thing.  Better upstream care, better care coordination, not giving the patient drugs that are contraindicated with each other and surprise, surprise they don’t end up back in the hospital.  It’s simple really.

Williams: So you mentioned before there’s kind of these two choices, the Danish model or the English model. You seem to favor the Danish model, bu if it carries all the way through to having the number of hospitals go down by a factor of six, that seems unlikely to be the path we’re going to take here.

Grundy: I mean it is what it is.  We have coming online the kind of transformation that occurred when Dodge was designing the transcontinental railroad in transportation or the livery men were standing around New York in 1906 and talking about whether they should get this new fangled thing.  They had horses and there were no roads.  We can look out not only externally, but even places within the United States and see places where the future is now.  That future is going to happen.  It’s going to happen.  It’s going to happen because the demand for efficiencies is going to drive that.

Williams: Tell me a little bit more about the role of the patient.  You talked about this pediatrician example where the patients are empowered.  Are patients basically ready for this kind of transformation?

Grundy: The patients love it.  Patient satisfaction in those 110 places I’ve gone, there is nothing more empowering to me than sitting in the doctors office, most of them don’t even have waiting rooms any more, but sitting in the office and talking to the patients as they come through, they love it.  A doctor in Portland started this process six or eight years ago.  He went from one doctor to eleven.  He has a little fee he charges because the insurance companies don’t pay for the e-mail yet, to kind of cover that sort of cost.  They vote with their feet.  He has grown from himself to eleven doctors by delivering this level of care and patients love it.  Patient satisfaction in Peter Anderson’s practice in Virginia when he moved to this model went from 63% to well over 90%.  What’s not to love?  You have a doctor that cares about you that makes his time more available to you and it helps to educate you around your disease.  You watch.  I sat in this practice and watched the exchange between this mom with acute asthma and the doc and you see, you just see, the appreciation of somebody who will communicate in either real time or close to real time and make that kind of commitment to keep your kid out of the hospital.  They love it.  The patient satisfaction just goes through the roof.

Williams: Now we talked before about the federal role, in particular the stimulus for meaningful use of electronic health records.  I’m wondering about generally on the payment side.  I’ve heard some complaints from health plans in this market in Massachusetts for example that have tried to do innovative things and they said: you know what, Medicare and Medicaid are the biggest payers and so anything I try to do isn’t going to have much of an impact.  Now I understand pediatrics could be a little bit different. But what has to happen on the payment system for this vision that you’re describing to be realized and what’s the federal role?

Grundy: That is is probably one of the big bottlenecks in this.  I would say there are a couple other bottlenecks, but one of the biggest bottlenecks is aligning payment for adding value.  Right? I do think that the folks that I talk to across the political spectrum and at the federal government and at the state level, etc. get this by and large because we’ve seen 370 some laws passed at the state level and we’ve seen a number of bills in which they’re addressing this with some of the language.  So I think that they get it, but the insurance companies are absolutely right.  That’s our frustration in that when I go to Massachusetts to buy health care for my employees, I’m pretty much stuck with the way Medicare buys its care and it buys its care as an episode of care.  Again, I’m empowered to buy that amputation, but I’m not empowered to buy the kind of care that really rewards the physician for not allowing it.  The doctors now make a bundle on doing the amputation.  That’s the dilemma.  We have absolutely misaligned money in to value out.  That’s the reason we’re twice as expensive.

Williams: Right.  That makes sense.

Grundy: 40% of the care that’s delivered, according to some folks, is unnecessary and I see it every single day.  I know parts of the country where it costs $17,000 for the last six months of life and others where it’s $127,000 and by the way the patients in the $17,000 category, this particular case in Iowa live longer and are happier with the care than the ones that are in a scenario that is over $150,000.

Williams: That makes sense.  Well it doesn’t makes sense, but certainly when you see that it shows you what the opportunity is.

Grundy: And when you start to think about this and you see it actually rolled out in some of these pilots, not only are the primary care doctors happier with this, the comprehensivists are seeing that their patients are more satisfied and feeling more rewarded about what they do.

Williams: Can you tell me more about your roles?  You wear two hats with the Patient-Centered Primary care and also your IBM role.  How do those two go together?  You’ve spoken to it somewhat, talking about how IBM is obviously a big purchaser of health care, but does it go beyond that?

Grundy: Yes.  It goes beyond that in the sense that from the perspective of a company that does quite a bit of health care technology, health care services, the whole migration from paper to the flow of data and data being analyzed is something that we would like to help provide a bit of structure around so that it’s not wasted effort.  We happen to be involved in the technology under the Danish system.  So we see how this flows out in a system that works and we understand how the structure of heath care is organized empowers the health care information technology to actually work.  So we see it in our interest as a company who is an American based company with some sense of social responsibility to help provide a bit of structure and flow to this so that it makes sense.  We spend a huge amount of money on health care for over 450,000 people, so from that standpoint we are very interested.  We are a global company so we see this from a global perspective. We really want to sell knowledge based information technology into a structure that is going in the right direction and is making sense.  We are kind of like Dodge when he was building the transcontinental railroad. I would love for there to be a design in which the two parts of the railroads actually connect.

Williams: That would be something.

Grundy: It makes sense. What we see now is that there are a whole bunch of folks laying rail, but not necessarily any that are ever going to connect or any of the gages are going to work together.

Williams: We’ve been talking a little bit about the future and also the past in terms of the railroad, but let me change the subject and ask you one historical question that I’m curious about.  Is it true that during the war of 1812 that the Federalists who were against it blamed “Madison, Grundy, and the devil” and that they were actually referring to one of your ancestors?

Grundy: Yes. One of the antecedents in our family is a guy named Felix Grundy and he was Attorney General at about that time frame.  Most of my ancestors were Quakers and he was quite “unQuakerly” in that he was one of the big pushers for the War of 1812. There are a number of counties that were named after him.  He died at the time that places like Iowa and Illinois were being settled and so in Iowa there is a Grundy County and I think there’s one in Illinois.  Felix Grundy.

Williams: I’ve been speaking today with Dr. Paul Grundy.  He is Director of Health Care Transformation at IBM and in addition, he is President of the Patient-Centered Primary Care Collaborative.  Paul thanks so much.

Grundy: Thank you very much David.  It’s only a pleasure.

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Rich Noffsinger is CEO of Anvita Health, a leading clinical decision support and health care analytics company. I spoke to Rich a little more than a year ago when the company was known as SafeMed and was launching its partnership with Google Health and completing a pilot in radiology at Beth Israel in Boston.  This time we spoke about the impact of the Federal stimulus package, prospects for health care reform, and how payers and providers are making use of Anvita’s solutions.

You can listen to the audio or read the transcript.

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 David Williams interviews Rich Noffsinger of Anvita Health: Play Now | Play in Popup | Download

In the Sunday Boston Globe (State helping to shape US efforts to digitize health records for all) Scott Kirsner writes about the prominent role of Massachusetts residents in shaping the health IT agenda. I’m quoted on the impact on federal policy:

…Massachusetts won influence because Harvard economist David Cutler was the primary architect of candidate Barack Obama’s healthcare plan. “Cutler sort of dreamed up the idea of spending $50 billion or so on healthcare IT as part of Obama’s platform, when Obama wasn’t likely to win,’’ says David Williams, a consultant at MedPharma Partners in Boston. “That number became the basis for the dollars in the stimulus bill.

The article highlights important influencers from Massachusetts including IDX founder Paul Egerman, National Health IT Coordinator David Blumenthal, CareGroup CIO John Halamka, and athenhealth CEO Jonathan Bush. Some other key people didn’t make the article, notably Partners CIO John Glaser and Massachusetts eHealth Collaborative CEO Micky Tripathi.

Egerman says, “Massachusetts is like the Silicon Valley of healthcare information technology.”

I’d like to suggest a less flattering comparison: Route 128.

There was a time when Route 128, outside Boston was a real rival to Silicon Valley. Silicon Valley had Hewlett Packard and Intel and Apple (and still do!); but we had DEC, Wang and Lotus Development. Sure we still have plenty of activity here but some serious players like Greylock Partners have shifted their operations westward.

Something similar may be going on in health IT. In particular, Massachusetts did a great job with the Massachusetts eHealth Collaborative, which used a $50 million grant from Blue Cross Blue Shield to completely wire up three communities with electronic health records and health information exchanges. The success of the pilot was recognized by key stakeholders and legislators, leading Senate President Therese Murray to introduce a bill to spend $25 million per year on health IT (later reduced due to the budget crisis) and to require EHR use throughout the state by 2015. The law was passed and signed, and the funds appropriated, but a lack of follow-through and leadership has meant nothing’s been spent.

Meanwhile, Massachusetts health IT talent is popular in the rest of the country. As the article highlights, much is happening in Washington, DC. But other states are also tapping into our resources. For example, New York and California are drawing on Massachusetts-based leaders –who could be spending their time in state, helping to put the $25 million to good use– to figure out how to make the most of the federal stimulus funding.

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Small practices worry they’ll have trouble benefiting from federal stimulus money, but it looks like they aren’t being forgotten. From iHealthBeat:

On Wednesday, National Coordinator for Health IT David Blumenthal said the federal government would pay special attention to individual physicians and small group practices as it works to implement the health IT provisions of the federal economic stimulus package, CongressDaily reports.

Blumenthal testified before the House Small Business Regulations and Healthcare Subcommittee along with pediatricians, optometrists and other health care providers concerned about being left out of federal health IT incentive programs.

Most physicians still practice in groups of 4 or fewer, so obviously this is an important segment to take into consideration. However, it’s reasonable to ask whether we should seek to preserve these small practices and why. After all, maybe they should go the way of the dodo bird, and just merge into larger organizations.

There are arguments for physicians to practice in larger groups, and this has led to an ongoing consolidation of practices. For example:

• Larger practices can spread administrative overhead  and capital costs over a broader base of activities
• Larger practices are better positioned to negotiate with payers
• Larger practices can provide more timely access to providers –by balancing capacity across more people
• Larger practices can produce enough data to do internal quality improvement programs
• Larger practices make it possible for physicians to take vacations and generally have a more reasonable lifestyle

However, there are also some downsides of larger practices. In particular they can be impersonal for patients –kind of like a factory.

Personally I prefer to see physicians who are solo practitioners or practice in small groups, especially those that don’t try to get me to see mid-level providers.

What I’d really like to see occur is for physicians to figure out how to lower the minimum efficient scale of their practices, so that small practices can provide a broader scope of activities, such as medical homes, and not get left behind in the information age. This can be done through the deployment of information tools that are geared to smaller practices, the intelligent use of outsourcing, and collaboration with larger groups for negotiating power and specialized services.

The management consulting field is one where new technology and business practices have lowered the minimum efficient scale. When I started in consulting more than 20 years ago we needed an office of at least 30 people to make it worthwhile. A “real” office needed a library (preferably with a librarian for advanced searches), report production department, phone system, copying machine and so on. But now with the Internet and associated services it’s quite possible to achieve better results with just a few consulting staff and no dedicated administrative personnel. In fact, smaller firms tend to have more reliable service providers (for things like email and file servers) than the big firms that do things in house in a more costly, less flexible manner.

Physicians should strive for something similar and ONCHIT should support them.

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