Electronic Health Reporter

Dan Rodriques, CEO of Kareo, discusses entrepreneurism, healthcare IT innovation, Kareo’s move into electronic health records and the EHR hangover.

As an entrepreneur, what is your approach to leading and driving innovation?
I have always been driven, and I knew I wanted to be an entrepreneur from a young age. Each of the three companies I have started came about for the same reason. I saw a problem and I wanted to fix it. I am a problem solver at heart and that is what drives innovation for me. I launched my first company, Scour, an Internet search engine, when I was 21. At that time, there wasn’t a way to search the web for multimedia content (photos, music, and video) and we developed Scour in response to that need. I had to learn about running a company on the job. I took what I learned with me on my next endeavor, which was a consulting firm. Each client brought a unique challenge with them and we developed technology solutions to the complex problems within their businesses. It was there that I started with a client in the healthcare industry. As I worked with that client, I began to see all the challenges facing healthcare and particularly small medical practices. This was the birth of Kareo.

How do you stay motivated, while keeping your team motivated and focused?
First and foremost, I love what I do and so it just doesn’t feel like work to me. Second, I have very high tolerance for risk. My father called it tenacity. I never give up even when things get tough. I believe in what we are doing and the change it can bring to the healthcare industry. I try to reflect my passion in the company culture because I think it is important for all employees to embrace the passion the organization has for helping small medical practices be the best they can be. So we invest in staff development programs and continual reinforcement of our values, and we challenge our employees to be creative and engaged.

What do you look for in identifying new leaders for Kareo through recruiting?
We are focused on building the most productive, imaginative and fun-loving team in healthcare technology. Our employees come from diverse industries and backgrounds because we’re looking for the best ideas and perspectives to help bring new innovation to the healthcare industry. We’re interested in hiring people who are interested in solving problems and building relationships with our customers.

We have doubled the number of Kareo employees in each of the last four years. We now have more than 180 staff. I think that the daily expression of our company values has resulted in our high employee satisfaction and low turnover. In fact, Kareo ranked 12th in the Orange County Register Top Workplaces based on employee feedback, which I am especially proud of.

Can you share any leadership principles you’ve applied successfully at Kareo?
I believe that creating a positive culture at Kareo is very important. Software companies often succeed or fail on the quality of their talent. To recruit the best candidates, you need to create an environment where the top talent enjoy working and feel challenged. Some of the ways that I do that are through leading by example and setting a standard for passion, drive and hard work, being transparent and open with my staff, encouraging collaboration among the team, and hiring for passion and potential and not just experience. These are the tools that I use to get the most from the people who work at Kareo so that we can provide the best solutions to our customers.

What are the most significant technology/IT challenges small practices are dealing with today? What is Kareo doing to address these challenges?
For small practices the biggest technology issues are cost and the complexity of healthcare and healthcare technology.

In the past, many solutions were expensive and complicated to implement. Practices had to purchase a lot of hardware and pay for regular upgrades and ongoing support. Technology changes so fast that solutions would become defunct and the practice would have to start again. In addition, practices face complex regulatory and financial challenges every day in healthcare, and sometimes the technology they use just makes it worse. Many small practices opt to stay with out of date software or continue using paper to avoid more cost and complexity.

Today, the landscape is very different. Kareo offers cloud-based solutions that can quickly and conveniently be accessed from any device. The pricing is clear and upfront and there is no commitment. The monthly fee includes everything — the software, training, support and plenty of educational resources. And we have a very robust development plan for continuing to improve Kareo. Every month we release new features to help the practices we serve improve the way they do business. With Kareo, the cost is affordable and the software helps significantly reduce the many complexities of healthcare instead of making them worse.

EHRs clearly are a major trend in healthcare. What’s happening in terms of EHR adoption and trends right now?
I think the biggest trend in EHR right now is our growing awareness of how dissatisfied providers are with EHRs today. We saw some statistics at HIMSS on that very topic. It is sad to hear that nearly 40 percent of providers wouldn’t recommend their EHR to another provider or purchase the same software again. Some in the media are calling 2013 “the year of the EHR switch.” I believe that this has happened because many providers rushed out and bought an EHR so they could attest for meaningful use. They didn’t spend the time making sure it was the right solution for their needs, and now there is an EHR hangover. So providers are looking at replacing their existing solutions with new systems that will work for their businesses long term. As they do this, they are looking for cloud and mobile technologies, and EHRs that are designed to simplify the workflow of their practice.

This brings us to another trend, which is the realization that cloud-based and mobile solutions will enable all healthcare providers, regardless of practice size, to have access to best in class software like never before. The ability to use smaller, mobile devices to chart patient visits is definitely changing the interaction between providers and patients. I call this “heads up medicine.” The tablet becomes part of the patient-provider conversation and not an impediment to engagement. The provider is talking to the patient, looking at them and not looking at a computer screen on the other side of the room.

What are the greatest challenges faced by physicians in practice and how can you help address them?
As I see it, there are several key challenges that physicians face. They fall into three primary categories: Financial, regulatory and technological.

Healthcare reimbursement is always changing. Today practices can expect declining payments, increasing operating costs, and a growing need to more effectively collect patient due amounts. This year, 30 percent of practice revenue will be coming directly out of patient’s pockets. Kareo’s practice management system provides all the tools practices need (eligibility verification , claim scrubbing, ERA, etc.) to effectively process clean claims and get paid faster. In addition, the software helps practices collect patient due amounts in several ways including credit card processing and online bill pay.

The healthcare industry is highly regulated and doctors are responsible for keeping up with a steady wave of regulations and documentation requirements. These include ICD-10 and meaningful use, among others. Kareo automatically updates our software to support many of these changes at no additional cost, and our free certified EHR helps practices attest for meaningful use as well as meeting requirements for other incentive programs. To provide additional support, we offer many educational tools and resources to support practices in addressing these issues.

For years, healthcare technology was expensive and complicated to adopt, making it hard to deal with these challenges. Some practices, especially small practices, found it easier to stay with paper or limit the technology they used. That’s why we designed the Kareo platform to help run the small practice smarter, more efficiently and always prepared for change. The cloud-based technology provides cutting-edge software at a fraction of the price, and it is intuitive and easy to use for anyone no matter how tech savvy. From scheduling to billing to documenting encounters, Kareo makes healthcare simpler not more complicated by providing the tools doctors need on the devices that work best for them.

What do you see as the key reasons that Kareo has been able to grow into the business it is today?
I think that there are three key reasons for our strong growth.

First, we have focused on a traditionally underserved segment of the market (small practices), and we have used new technologies (online marketing and cloud-based delivery) to provide a solution that is valuable to those practices and superior to traditional “heavy” solutions.

Second, we have made it very easy for our customers to do business with us, and we call this the “Kareo Way.” We have done this by utilizing tools like online education, pre-recorded demos that don’t require talking to a sales person, simple and transparent pricing, no upfront fees or long-term contracts, signup with a credit card and automatic account provisioning, assigning a customer success coach and letting them cancel at any time.

Third, we’ve invested in building a diverse, talented team and a great company culture. We have people from healthcare, but we also have team members from other industries who bring new perspectives and fresh ideas to Kareo.

This is why Kareo ranked among the top 100 in Forbes list of America’s most promising companies, coming in #1 in Orange County and #58 nationwide.

What is the most successful business move Kareo has made under your leadership?
We have had a lot of successes, but I think our recent move into electronic health records has been more successful than even I imagined. Last year the opportunity to purchase the EHR developed by Epocrates arose. Our customers had been asking for an integrated EHR for Kareo, and we saw this as a chance to rapidly deploy a new mobile clinical software solution for doctors to improve clinical care, patient safety and outcomes. After a rapid nine month design, assembly and go-to-market process we launched nationwide in February. In just more than a 30-day period, more than 2,000 medical providers have downloaded the Kareo EHR and are using this mobile technology to document patient visits, order treatment and meet regulatory incentives available from the U.S. government.

Tell me about your thoughts of the recent move by Kareo to add EHR and the effect on the relationship with Practice Fusion?
While we value the relationships that we have developed with other EHR vendors, our first priority has to be meeting the needs of our customers. We built our business by giving healthcare providers easy, affordable practice management (PM) software that helps them run the business side of their practices. As the adoption of electronic health records gained steam in 2010, our customers asked us to integrate with strong EHR solutions built by Kareo partners. This approach was successful and still benefits many of our doctors today. However, recently customers have been telling us what they really want is a totally integrated PM and EHR solution delivered by Kareo. We responded to this customer demand with the launch of Kareo EHR, and we now are able to solve both the business and clinical needs of their practices. That said, we are absolutely committed to maintaining an open platform and continuing to support non-Kareo EHRs.

Why did Kareo enter this market now? What are its goals for the small practice?
Kareo has been serving small practices’ needs for the past eight years, and we have always had one primary goal—helping them become best practices. We are committed to understanding and supporting the realities of small practices better than anyone else. That is why in 2010 we began partnering with EHR vendors to provide quality clinical solutions to our customers. However, after overwhelming customer feedback, we decided to launch our own integrated EHR and billing services in 2012.

Dan Rodrigues is the founder and CEO of Kareo. He started the company in 2004 with a vision of simplifying medical offices with web-based medical billing software that replaces the expensive and complex medical billing and practice management systems doctors have today. Under Rodrigues’s leadership, Kareo has created a medical office software platform purpose built for the small medical practice – generally five or few physicians. More than 60percent of practicing physicians in the U.S. are in small practice groups. Kareo’s platform, which includes an electronic health record (EHR) solution, launched in early 2013, is the only software platform designed for small practices and the patients that rely on them.