SM: Is there anything in the software-as-a-service world that you are observing or that you could tie up with?
KL: Traditionally all of those IT systems have been client-server types of relationships. All of the newer point solutions emerging are using the software-as-a-service model.
SM: Who are some of these companies?
KL: There are a number of little EMR companies. They are all private companies and ones that you would not know about unless you were in the business, such as eClinicalWorks. They have a SaaS electronic medical record service, and I think Athena Health is operating a SaaS model for their claims. Instant Dx has a SaaS e-subscribing application.
I think that as standards emerge these companies will take off. The government is trying hard to set these standards, but it all just happens very slowly. As the standards take off these companies will make more progress.
SM: You already have $100 million in revenue, right?
KL: We are a little shy of that. Last year we had $65 million, and this year we have had some good growth. We are getting closer to that mark.
SM: At your revenue threshold, you could become the consolidator for that space, especially given the channel you have established.
KL: To be fair, I would not put us in that place yet. We have an incredible reach that nobody else can match. Most of these health care IT companies can get to 10,000 physicians. We have over 200,000 physicians and over 500,000 health care professionals. Today we have a narrow application in terms of what we do with those physicians. Over time we can broaden that. I would not want to take on the whole enchilada in terms of electronic medical records, practice management systems and e-subscribers systems. That would be a bit much for us.
SM: It sounds like the market will remain fragmented for the next 5-6 years while these little pieces start getting built out.
KL: I think that is a correct assessment. There are some acquisitions going on within the healthcare IT companies, but such mergers or acquisitions are happening because companies are struggling versus any effort for consolidation.
SM: Somehow you have been able to manage word-of-mouth growth very well. Is there anything that is preventing other companies from experiencing the same phenomena? Why is the healthcare market so backward?
KL: One of the main points I have addressed is that the incentives are misaligned. There is another inhibitor. You cannot require the healthcare providers to change their workflow. You have to be a tool or service that fits into their existing workflow. Too many of the products require them to change the way they interact with patients. It is too invasive. That is why we have experienced great adoption. Our tools are convenient and easy. We are not invasive. As we move into new areas, we have to be careful that we do not fall into the same trap of requiring clients to change to match us.
Patient medication history is a good example. To date, there has not been an easy way to get a physician a list of all the medications a patient is on. What is required is having a client server system with multiple data feeds. It is a big IT endeavor to get that data into the physician’s hands in a data form. Now some intermediaries have emerged. A company called SureScripts just merged with RxHub, and they have medication data from pharmacies and insurance companies, that a company like ours can now access. All of a sudden you take an intermediate service like theirs and a lightweight application with broad reach like ours, marry the two, and now you can provide physicians with the complete medication history in a software-as-a-service model.