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Healthcare Reform Through Entrepreneurship: Phytel CEO Steve Schelhammer (Part 5)

Posted on Sunday, Apr 12th 2009

SM: It sounds as though physicians need to be on some form of EMR system to use Phytel. Is that correct?

SS: No. If we had architected our solution to be dependent on EMR, then we would only have access to 5%-10% of the marketplace. We can access EMR data, and we will do more of it in the future. The more data you have, the more you can do with it. Everything I have talked about here we can do by accessing the data and practice management systems. We are one of the few solutions in the marketplace that has gone down that path.

SM: Your base assumption is that all doctors will have electronic practice management systems?

SS: That is all they have to have. If they have that, we have a value proposition that works for them. If they have more, then we can do more.

My previous background was in healthcare services. Much of it was developing the disease management model and marketplace. I had regrets that we could never figure out how to do this with the physician. I believed that until it could be done with the physician, it would be sub-optimal. I also said if I could build the next generation health management model, it would have to be physician-centric. The programs are geared for patients but branded and distributed under the name of the physician.

SM: Who is paying this time, the physician or the health insurance companies?

SS: The physician. Large multi-specialty group practices are our core focus.

SM: The drivers you are keying in on are performance requirements that insurance companies levy on physicians? 

SS: That’s right.

SM: How many health insurance providers are doing that?

SS: Virtually all of them now. The top 50 cover a vast swath of America. They have pilot pay-for-performance, medical home and bridges to excellence programs in place. State governments are voting on pay-for-performance initiatives. There is a lot more going on than people realize. There is increasing momentum around this dynamic of payment reform.

That is a big part of what we are tapping into. There is a real opportunity for physicians to lead performance. They can lead it, and there is a payment structure which rewards them for outcomes. In the past there was not a payment structure to reward physicians for leading disease management, nor did they have the capacity to do it.

Two things have changed. Payment reform was the first. The second is that now we have technology solutions such as automated messaging systems. These technologies have been vetted and tested. In essence, we can leverage those technologies to extend the reach and influence of physicians. This is a real change in the environment that Phytel has positioned itself to address.

SM: The market seems to have aligned well to create an opportunity for Phytel.

SS: There are three words that identify the opportunity of Phytel. The first is motivate, and we have already discussed how we are going to motivate patients to reconnect with their physicians. The second word is optimize. Right now the patient/physician encounter is all too infrequent. Physicians prepare for meetings with their patients. What are all the things that can be done to optimize the impact of that meeting? That brings me down the path of leveraging data and getting the physicians better decision-making data at the point of care. We can leverage automated self-assessments and automated educational opportunities in the office as opposed to tying up very expensive people doing that.

The third word is extend, which is entirely dependent on technology. We need to extend the reach, power and persuasiveness of physicians beyond the walls of their practices. That is where it has fallen into an abyss. When patients walk out the door they are motivated, have heard some good advice and have learned about some things that they need to change. Then they may not see their physician for another 3-5 months. That influence wanes as a function of time. We want to leverage technology such as messaging and patient portals. Patients can interact with smart assessments, and logic drives content back to both the physician and the patient. We have a host of other strategies to extend the voice and power of the physician.

Motivate, optimize and extend are essentially the three pillars of our strategy. That is our approach to the marketplace.

This segment is part 5 in the series : Healthcare Reform Through Entrepreneurship: Phytel CEO Steve Schelhammer
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