Michael Weintraub is president and CEO of Humedica of Boston, MA.
Tell me about yourself and the company.
Humedica is a business that, in addition to incubation phase and the launch of the business, has been around for roughly five and a half years. We formally launched the business in 2008.
Our vision is around population health business intelligence solutions. The founders of the company, the members of the team, and I have been working within and around health informatics, health analytics for anywhere from 20 to 30 years. I’ve been in this space for about 30 years and have always been passionate around the need to get our arms around health information to drive value and change in the industry. That’s what this company is all about.
Our focus is in moving from electronic data to liquid access to information and doing that across the continuum of care longitudinally. Our view is that there are a lot of solutions out there that are brought to the industry, but there was a need for an organization that’s focused passionately and exclusively focused on bringing together all the disparate clinical financial and operational data across the continuum of care. That includes hospital information, and importantly, ambulatory clinic data in multi-specialty medical groups. Pulling that information together in a centralized business intelligence analytic way that allows a chief medical officer, VP of quality, CMIO ,and others in the organization to get their arms around the population that they treat across the continuum of care. That’s what we’ve been aiming to do since the beginning. That’s our focus, our vision and our mission. So far, so good.
Your timing must have been fortuitous. Not too many folks were interested in population health management back in 2008.
I’ve always said that it’s 51% luck at a minimum. You know the old saying about, “It’s heavily perspiration and a bit of inspiration.”
I’ve been working with claims-based information for quite some time and saw what the opportunity was with that data, as well as the limitations and the future need. I’ve always said with a smile on my face that when we started this company, Obama was a senator. If you watch the trends out there, we had a hunch of what was coming together.
Earlier in my career, I spent 10 to 15 years working with clinical data in the provider setting before EMRs. I was involved in companies that were successful when it was about chart abstraction and at grabbing that information using medical record coders and doing analytics on abstracted information. For me, it was the coming together of a distinct need around clinical information earlier in my career and then seeing the movement in technology and the availability of information as we moved from chart-based data to then, “What can you do with electronic data on the claims side?” to then coming full circle to, “What if that data actually was electronic?”
When we started the business, EMR penetration was somewhere in the high single digits. We saw what was happening in the industry with some of the leading EMRs starting to really accelerate. We were watching the technology and regulatory movement and thinking about the opportunity. If you think about what’s happened in the industry, health reform has really driven technology and EMR penetration based on the incentives and the ultimately the disincentives if you don’t have an EMR. Health reform has been a driver to technology adoption.
On top of that, from a regulation and finance perspective, i.e. healthcare reimbursement, there’s a real focus on operational efficiency and clinical effectiveness as key drivers, more so than ever. Based on regulations and finance as a key driver and technology, we saw this coming.
The healthcare industry is really looking more and more like it needs to manufacture value at an operational level. The financial system, risk-taking, and reimbursement are all moving more and more into an alignment that – and perhaps I’m an eternal optimist of an entrepreneur — but I really believe that there’s an efficiency and effectiveness requirement as it relates to outcomes and the need to truly measure quality and cost. That starts from moving the needle to looking at data to truly transforming that data into information and ultimately into insight to drive action.
My 30 years in healthcare have all been focused on building – once upon a time we called it decision support tools, now we call it business intelligence tools – building analytics that leverage the transactional data that moves through the pipe and taking it to the next level. I think the DNA of an informatics and analytics company is very distinct, and that’s been our focus. We leveraged what we saw happening at the technology level and a regulatory and financial system level.
We can all discuss and debate how long that will take to change and what the slope of that curve will be, but I’m optimistic more than I’ve ever been that the drivers are in place to force the focus. I think that the macroeconomics are such that sustainability is on people’s minds, more than ever before as the national spend on the healthcare industry … 20% of GNP is not out of the question anymore. The question becomes, what is sustainable? Are we getting to a true tipping point that creates the motivation for change?
Hopefully the regulatory drive and the changing economics create the focus. I’m sure it will take longer than we all want and I’m sure there will be a lot of bumps in the road, but for me, I felt that the opportunity was there to build Humedica into the kind of company that I felt could drive the value. The need is there.
The company was initially called HIT, Health Insight Technologies. When Obama and others started using that term more and more, we realized that that name would not survive, hence the focus on human medical, or Humedica, to understand to the patient experience in the healthcare delivery system across a continuum of care and be able to study it at the population health level.
A lot of companies offer business intelligence tools, including some big ones. Who are your main competitors and how are your solutions different?
I say this as a member of the healthcare industry, not criticizing it from the outside-in, that I believe that there’s a significant level of sorting out and confusion occurring now. The focus up until now and continuing for the next several years will be EMRs. Do I have the right one? Should I switch to a different one? Do I have one? Do I need one? How do I get one? There’s a huge focus on EMRs.
Certainly the next phase after EMRs is, “What do I do with the data?” There’s a big difference between transacting with the data at the point of care versus doing the analytics that we do. The industry right now is in a period of sorting out. There’s a bunch of major buckets of firms out there that all touch and talk about analytics.
What’s interesting is clinical analytics and business intelligence was a concept that was not anywhere near as strategic as it is today. The good news about health reform is it has made this strategic. The bad news about it is it’s made it so strategic that there’s a sorting out occurring that’s causing the provider industry to sort out what it does about this.
If you look at the buckets of firms that all touch this, there are EMRs, and more and more of the EMRs are saying, “Don’t worry, we’ll get to this.” We believe that there’s a distinct difference between a specific EMR, whether it’s touching some of the data or more of the data in a provider, but many providers have multiple EMRs, whether it’s within the inpatient setting or inpatient versus outpatient. Cutting across and pulling it all together is a very different value proposition.
But there are EMRs that are all suggesting, “We’ll get into this over time.” I believe that they have their hands full right now. It’s like Y2K for the EMRs. There’s so much activity. I don’t believe the providers can wait for that to be developed, nor do I believe that software firms — as opposed to analytics and informatics firms — have that as a distinct competency. There are claims-based firms out there that do analytics with claims, and many of them are now repositioning as population health, ACO, etc. but there’s a distinct difference in looking at this information for population health with claims versus clinical data.
There are firms out there that are systems integrators and data warehousing firms like Oracle, IBM, Accenture. They end up oftentimes being more our partners than our competitors for a variety of reasons. There are regulatory reporting tools that touch on population health, but they’re more focused on regulatory reporting. There are application-specific firms that provide clinical data that are very narrow and specific in application. There are health and information exchanges and vendors as well that are pulling all the data into a common pipe as opposed to doing the analytics. We are starting to partner more and more with many of the firms in each of the categories. There are business process outsourcing firms that are now building clinical process redesign competencies, again partnering with us more so than competing.
We were the first to purely focus on clinical analytics. I believe we have years of lead time from a development perspective and from a competitive advantage in that regard. Competition is good. It creates a focus on best-of-breed and advances the capability on behalf of the industry. But there is no single firm out there that is distinct with and purely focused the way we are, but there’s certainly a buzz where every major firm and lots of boutique specialty firms are all positioning and or repositioning as population health and ACOs. I’ve seen many of the firms eventually complementing with us, collaborating with us right now more so than competing.
Allscripts is now a Humedica partner. What competitive advantage led Allscripts to that decision?
It’s a tremendous and terrific partnership. It was driven by the leadership and boards of the respective companies. Many Allscripts customers have multiple EMRs, and Glen Tullman, CEO and Lee Shapiro, the president, and I have a very common vision on the need to move towards an analytics and informatics foundation. Allscripts has branded Humedica within their business as they go to market as, “Clinical analytics powered by Humedica.”
When they saw our offering, they saw best-in-breed capability that they felt would create value for their customers and our mutual customers. What we saw was an opportunity given the accelerated movement of the industry in focusing on this. They’ve got an inside and outside sales force combined of 600 people and growing. What we saw was an opportunity to go to market faster, better, more effectively and more efficiently.
We’ve been working on that partnership for several quarters. I believe you’ll see the fruits of that over the next one to two quarters in a very significant manner as we start growing some mutual customers together based on our products and their sales channel. It’s been phenomenally successful thus far.
What are clients doing with your real-time capabilities?
There’s one product on the market and there’s one product in development. In the inpatient setting, the product is being used for clinical surveillance. In the hospital setting from a CMS perspective, regulation is such that 30-day readmissions and preventable readmissions complications will not be reimbursed. From a clinical surveillance perspective, tools are up and running in a hospital setting and key therapeutic areas.
The product in development has the capability to provide real-time surveillance in a clinic or ambulatory setting focused on proactive patient management in chronic ambulatory areas, stratifying risk and focusing on a Patient-Centered Medical Home, which more and more of our multi-specialty medical groups and clinics are focused on.
Your recent financing around raised your total a pretty big number, over $50 million. How have you invested that money?
The first round of capital was used in the formative stages of the company’s development, the first three-plus years to devise, develop, and deploy what we believe is a world class product portfolio for the provider market and to get validation from our customers in that regard. We believe that’s a huge competitive advantage and a sustainable barrier vis-a-vis the competition.
As we’ve gotten that validation, a few months ago in KLAS’s market research 300-page report, we received the highest rating of any business intelligence firm, with a rating of 91.8. A new category was created, essentially a clinically powered category where a solution has clinical capability, based on their discussions with our customers. All our customers in that report said they would buy again.
The first round of capital was really focused on building the most innovative capability possible. The second round of financing is focused on commercialization in a very significant manner. We currently have customers in roughly 20 states, but our ambition is significant. We want to bring this offering to the market at large. That meant a sales force, field organization, customer organization, managing our channel partners, which includes Allscripts as well as the American Medical Group Association. That round of capital was meant to exploit the capability and partner with a provider market in a broader way to accelerate bringing this to market and managing a growing client base.
You came from Leerink Swann. What experience did you gain there that will help you build Humedica?
Leerink Swann is an investor in the company and provided the organizational platform that we were able to incubate this business. I was there for a short period of time, only about a year and a half. The majority of my career has been focused specifically on entrepreneurial activities such as this one. Leerink clearly has an exclusive healthcare focus and they’ve provided tremendous value as an investor and a board member as well, but it provided the platform where we were able to incubate this business, pull together a team, and spend about a year to a year and a half prototyping and thinking hard about how to bring these solutions to the market.
Where do you want the company to be in 5-10 years?
We’re at an important point. We have a partnership with Allscripts, which is a leading EMR. We also have a phenomenal long-term partnership with the American Medical Group Association, which has members in almost every state in the country and its membership treats one on three Americans. What we would like to be is the de facto leader in bringing health informatics insight at a population health level to the provider industry as they get their arms around their organizations managing cost, quality, and risk and compete.
The pressure on these providers is significant. They’re making significant investment in technology and now they’re ready to harness, we believe for the first time, all of this information to study and enhance and improve their operation as they bring world class care to their customer, the patient. That’s our vision.
We’re very, very excited about what’s happening in the industry. The activity level is at an all-time high. We think 2012 is going to be a mainstream year, where clinical informatics and business intelligence become a significant initiative for more and more providers in the US.