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.
In a recent conversation with Steve Ferguson, vice president of Hello Health, he described how the company is identifying new revenue sources for practices while working to engage patients. Even though the company’s business model is one that sets it apart and helps it rival other free EHRs, like Practice Fusion, I left the conversation with him wondering why more venodrs weren’t trying the same thing as Hello Health: trying something no one in the market is trying to see, if by change, a little innovation helps pump some life into the HIT market.
Along the same lines, myself and thousands of others in HIT have wondered why systems are not interoperable and, for the most part, operate in silos that are unable to communicate with competing systems.
Certainly, there’s a case to be made for vendors protecting their footprints, and for growing them. In doing so, they like to keep their secrets close; it’s the a business environment after all and despite the number of conversations taking place by their PR folks, improving patient health outcomes comes in only second (or third) to making money.
However, let’s move closer to my point. Given the recent rumors that Cerner and McKesson are working on a joint agreement to enable cross-vendor, national health information exchange, I’m wondering: Why don’t other vendors partner now and begin to build interoperable systems.
According to the rumors, the deal, if completed, could shift the entire interoperable landscape for hospitals, physicians and patients. It would position Cerner, which has more EHR users, and McKesson, which has a strong HIE product in RelayHealth with a loyal user base, to take on Epic Systems, a leading EHR vendor.
An announcement is expected at HIMSS13.
Here’s why this is important news: Interoperability mandates are coming. Like most things, it’s really just a matter of time. Systems will be forced to communicate with other, competing systems. They should already. It’s actually a bit shocking that given the levels of reporting required of care givers, the push for access to information through initiatives like Blue Button and patient’s access to information through mobile technology that there’s not more openness in the market.
The Cerner/McKesson news is incredibly refreshing and worth a look. Two major competitors may be realizing that by partnering they’ll be better able to take on each company’s biggest competitor: Epic.
Imagine connected systems exchanging data. The thought alone would be marketable across several sectors of the healthcare landscape and the move worthy of reams of coverage, which would lead to great brand awareness for each and the change to do what all EHR companies aim for: To create thought leaders; to stand out; to set the market on its heels.
If nothing else the partner vendors would stand ahead of the pack when future interoperability mandates are enacted and will be seen as experts in the exchange game. Tongue and cheek aside, the idea really is a good one and with no one currently doing it, it’s a great opportunity for a couple of HIT companies to actually move change forward and create an environment where information can be easily exchanged across practices, across specialties and across borders.
Then, perhaps, we’ll see a real commitment to improved patient health outcomes rather than them simply trying to improve bottom lines.
Guest post by: Lauren Fifield, senior health policy advisor, Practice Fusion
Many HIT vendors will be largely focused on major development efforts to meet 2014 edition certification requirements for meaningful use. However, as Stage 2 measures aim at improving patient engagement, quality and interoperability, we may be surprised by the new technologies that existing and new companies develop to meet the requirements:
Patient health records or portals allowing for access to and transmission of health information
Consumer applications to provide patient education and communication with providers
Exchange platforms to share clinical information like immunizations, diseases and more
Clinical decision support tools for medical professionals to improve their quality of care
We’ll also see new industry movement toward improved patient safety through provider training, reporting and other efforts. Thanks to the successful collaboration between vendors and the agencies that help providers achieve meaningful use, we expect the Food and Drug Administration to work with the Office of the National Coordinator for Health IT (ONC) and the Federal Communications Commission (FCC) to engage key stakeholders by addressing the 18-month study mandated in the FDA Safety and Innovation Act of June 2012.
Given the continued and ever-growing provider outcry to address the broken payment system, the Department of Health and Human Services (HHS) may finally develop plans to move to a reimbursement system that relies on quality and outcomes. With the recent announcement of more than 106 new ACO contracts, growing provider participation in new payment models, and the new possibilities opened up by technology vendors, it may at last be time to put this broken system behind us.
Though much of the 2013 transformation is fueled by government initiatives, the healthcare industry is at a tipping point regardless of any push on Uncle Sam’s part. Patients will soon be expected to pay for more of their care, making consumer health tools, telehealth and personalized medicine more appealing and important. Providers tired of the payment system will partner with technologists and private payers to try alternative models and cash-based business. And big data might just find a home amid all these new patient, provider and health system innovations.
Can a business model be beautiful? Yes, it can, according to Hello Health’s Steve Ferguson, vice president of marketing.
The business model, and the way things get done, at Hello Health are what set it apart from other electronic health records in the market place, Ferguson said.
Hello Health was built from the ground up and launched by the private company Myca in 2008. It made its meaningful use certified EHR available in 2011. The Hello Health system includes everything needed to run a small practice, the area of the ambulatory market in which the company focuses.
Originally designed for single doc practices, the system now scales up, with practices of as many as 10 physicians using it.
At its most basic, Hello Health is a web-based EHR and patient health record, and it’s free to for qualified physicians to use. A qualified practice is typically one with 1,500 active patients on its panel. Unlike Practice Fusion, another well-known free cloud-based electronic health record, it’s not powered by ads, but instead is a revenue source for practices as monthly access subscriptions can be sold to practices’ patients, allowing the patient to access the system’s patient portal, where their personal information is kept.
The patient subscription model allows patients to schedule appointments, view lab results, communicate with their physicians through the HIPAA-compliant portal and, in some cases, view their complete record including visit notes.
Steve Ferguson, vice president of marketing at Hello Health
Those patients that don’t subscribe are still allowed limited access to the portal, but they can’t access all of the information available to them. Cost of monthly subscriptions range between $3 and $10, Ferguson said, but the average is closer to $5.
The annual revenue earned through patient subscriptions is $10,000 per practice, he said, with 30 percent of patients, on average, signing up in each of the practices Hello Health serves. In some cases, more than 50 percent of a practice’s patients have signed up for access to their health information.
Currently, the typical age of a Hello Health subscribing patient is 57 years old and has at least on chronic condition. The “indestructible” 30-something is less likely to subscribe to access to the portal, said Ferguson.
In some cases, patients are able to skip a practice visit or an in-office consult because of their prescription to Hello Health, Ferguson said, and practices are okay with it because they can still bill for the visit.
It’s a simple model, and with the number of portals currently available and the likelihood that access to them will increase alongside meaningful use stage 2, it’s a wonder why other vendors are not creating similar strategies.
“Companies are so in grained in the license model, and on paper it may seem easy to change, but it’s tough to change a business model,” Ferguson said.
Among another key difference between Hello Health and competitor systems is that it doesn’t charge for training and allows as much training as is needed so practice employees are comfortable using the system and are able to educate patients about the value of subscribing to the patient portal.
“Practices really have a partner in Hello Health,” he said. “We take extra time to implement and train employees so they can educate patients to use the systems and better understand the benefits of it.”
Ferguson said Hello Health is experiencing explosive growth, though, would not confirm the number of practices using the system nor the number of patient subscribers because the company is private. However, it is currently available in 27 states, with concentrations of users in New York, New Jersey, Texas, California, Georgia and Florida.
The value proposition to physicians is Hello Health’s business model and the fact that it is a revenue driver.
“Our differentiator is our business model,” Ferguson said. “Everyone tries to sell to the physicians, but most physicians are forced to push back because they can’t afford another bill.”
The fact that the system is free to implement and offers unlimited training is also a plus, he said.
