Louis E. Halperin is CEO of OTTR Chronic Care Solutions of Omaha, NE.
Give me a brief overview about yourself and about the company.
I’m CEO of OTTR Chronic Care Solutions. I’ve been in healthcare about 25 years and worked on just about everything there is technology-wise except for in the pharma space.
The company was founded as Hickman-Kenyon Systems in the solid organ transplant business. We’ve expanded that after acquiring the company last year into OTTR Chronic Care Solutions. When you manage patients that are awaiting organ transplant, they’re generally the same types of disease states with chronic conditions – liver disease, kidney disease, all the way up to a heart failure. We think it’s an important niche in the marketplace, particularly in light of the move to accountable care organizations and the changes in insurance.
I was intrigued by your background. You got an engineering degree from one of the best schools in the United States, you’ve got patents, you’ve worked for big companies. I’m curious how your life’s journey took you to where you are today.
I worked for a few big companies, being Medtronic, GE, and Philips. I got restructured out of Philips a few years back based on the job I did and being remote from the corporate offices.
I was very fortunate that I had built some relationships here in Nebraska with the medical center through an angel investing group that I’ve been involved with. I started doing consulting for them. I found HKS Medical Information Systems and we put together a partnership with an equity partner out of Dallas and a business partner who’s our chief operating officer, Paul Markham. We acquired the business last fall because we saw a great opportunity to grow it. It’s the right place at the right time. All the things I did working for big companies prepared me to lead this business.
It might be a surprise to the person who spends most of their time thinking about healthcare IT in hospitals and physician practices that there is a transplant industry out there and it has specialized needs that may not be met by traditional software. How big is the transplant industry and how are its IT needs different?
If you look at solid organ transplant, there are approximately 254 solid organ transplants centers in the US today. What most people don’t understand is that transplant was the original accountable care organization. For more than 20 years, CMS has been making lump sum payments to solid organ transplant centers for the care of patients, so you have the full Medicare cost report and driving that forward.
Your patient may travel 100, 200, 300 miles to solid organ transplant center to be evaluated and put onto a transplant waiting list. You may be on that list for anywhere from months to years to as long as a decade, depending on which organ is at risk and what your absolute condition is. Because of that, you need to track the data around those patients very differently. You’re not looking at it as one episode of care and the next. You’re looking at it over a 3-, 5-, 7-, 10-year period of time. That’s the same in the post-transplant world.
The other thing that’s different is that the data that you’re looking at isn’t just from the healthcare system where you’re going to be transplanted. It maybe from a laboratory that’s local to your community. If you’re a kidney patient, a local nephrologist may be following you and providing you your direct day-to-day, weekly, monthly care.
You may only be seen at the transplant center once a year every two years for a follow up. Yet when an organ comes available that has your name on it, that surgeon only has a few minutes to make a clinical decision about that organ — whether it’s right for you and whether they want to accept it. Therefore, they want to see all the data, not just from that one institution.
For a lot of healthcare systems that have transplant, their profitability really depends on transplant. There was a major Midwestern integrated delivery system that we were visiting where the transplant surgeon ensured us of roughly 40% percent of the total profit margin for the healthcare system came from having transplant. It’s not just from the surgery, but it’s what it does to your labs, pathology, bringing in patients for evaluation and such. Centers that have transplant as part of their business — it enhances their profitability and helps them deliver those service lines that aren’t profitable. It’s a challenge, but that’s what we’re seeing, that’s why we love what we do. We think we can help people.
I supposed you have a finite list of prospects since there are only 254 of them. Do you have competition, or are you the only recognizable name in the transplant niche?
There are few other names and some companies that do it. They’ve grown out of a couple of other centers that provide software. But it’s a challenge, because not everybody understands that there are special needs in transplant. Again, it’s the longevity of time of the data that you’re looking at it. It’s how physicians want to be able to see it and how surgeons want to be able to see it differently. So there is some competition. There are companies that grew out of Ohio State and UPMC.
There are EMR companies that want to try and play in the space with us. Some can be credible about it, but it’s really a different way of looking at data than what EMRs tend to do.
I would have assumed that this a critical, regulated, and not very large market that EMR vendors would steer clear of. I see from your literature that you’ve interfaced with systems like Cerner and Epic. Is it a difficult sale to make when you tell a new Epic customer that they now need a best-of-breed transplant solution?
We’ve been reasonably successful. I can point to a couple of sites in Florida where Epic was the EMR of choice and the departments wanted their own solution. We’re currently in negotiation with another center that has Epic. Epic has a solution that they’ve brought to the market around solid organ transplant, but we’ve still had pretty good success there.
But it’s a challenge. Epic’s a great company. They’ve got great software for what it is that they do. It’s competition, but I told the team here that I’d just as soon compete against the best than I would against anybody else. It has been a fun fight.
We think that we’re different. If you were to ask me where the EMR is great, I’d say when you’re documenting inpatients in a bed of if they’re in your clinic as an an outpatient and you’re going to bill for those services. EMRs are the absolutely correct place to be able to document on your patient.
If you’re looking at data that might Meaningful Use Stage 2, Meaningful Use Stage 3 where it’s a remote lab, it might be a remote follow-up, it maybe follow up notes from a local nephrologist or hepatologist who’s following that patient because they happen to live … I’ll make it local here in Nebraska, where we’re headquartered. They might be out in Scottsbluff, which maybe even easier to get to Denver than it is to get in Omaha if you were going for a transplant. But those patients are not going to travel 300 or 400 miles to get their regular follow-ups for care. It just doesn’t work in an EMR. Again, we will see what happen as Meaningful Use Stage 2 and Stage 3 get here, but as of right now, we’ve been doing this for close to 20 years and we’re very comfortable at being able to track that data.
Transplants have gotten to be almost routine, I guess. You don’t hear a lot about it except when they do one of those donor chain matches or somebody gets in trouble for poor record-keeping or someone like Dick Cheney or Steve Jobs gets a transplant. Do you need special knowledge on your end to deal with procedures that are somewhat political, always expensive, and critical to both the recipient and the person who didn’t get the transplant?
One of the things that I found in 25 years in healthcare is that having domain expertise, no matter what it is you’re selling, is critical — whether you’re in cardiology, radiology, oncology, or transplant. I think that our customers look to us to be able to help guide them as to how to use a transplant database to keep track of the data that they need.
You look at it as a highly regulated part of the business, also. There’s CMS regulations and audits which can cause a program to be shut down. There’s a group out of Virginia called the United Network for Organ Sharing or UNOS, which is also a regulating agency. Every patient that’s listed for a solid organ transplant is listed according to the rules of UNOS. They get organs based on hierarchy and priority that UNOS has established for allocating organs out. It’s not just matching a type of organ that’s there.
You mentioned that Cheney received a heart within the last couple of weeks. There are only about 2,000 donor hearts that are available for transplantation every year in the US. That limited number is one of the reasons why Ventricular Assist Devices or VADs have grown in use as a destination therapy.
Everybody says Dick Cheney was too old or he only got the heart because he’s a former vice president of the United States. When you look at the rules that are there, he got a heart based on his condition, based on his likelihood of success in a transplant, based on how it matched to that organ. He was the best person listed in a region where that heart could transplanted to be able to receive that heart.
There’s all this regulation. That’s really why we’ve had great success in staying in the centers where we are and co-existing with EMRs even as things change. We help our customers to be able to meet their regulatory requirements. We helped them meet CMS. We helped them present the data that they need and we help them present the data they need to make their UNOS certification.
Steve Jobs moved to Nashville because he would be higher on that area’s waiting list, which is allowed. Is the transplant business competitive at all, other than geographically, or is it just one big transplant center per region?
It depends on where you are. If you go up to the Northeast and you go into New York City, you can find the three major hospitals directly in New York City that all do solid organ transplant — Cornell Presby, Mount Sinai, and Montefiore Hospital. But even when you then get outside of New York City, you can circle down into smaller communities where there are transplant centers. Kidney being the dominant transplant center, followed relatively closely by liver programs and then heart, lung, etc.
It really depends on where you are. When you get west of Omaha or west of the Twin Cities in Minneapolis and St. Paul, the number of transplant centers certainly decreases until you get to California and the West Coast. It all depends on your geographic location. The ability to get yourself to a transplant center if an organ becomes available is what’s critical. The reason why Steve Jobs could continue to live out in California while being listed in Tennessee is that he had access to a private plane. When that organ became available, the clock was ticking. He was rushed out to the airstrip and they got clearance to fly. That’s how he got to Nashville for his liver transplant.
Does the hospital keep its own list or is there a registry or bureau that just tells the hospital, OK, you’re getting a patient?
That process is done by UNOS. The whole organ procurement side of the business is not something that we manage directly with our software. Throughout the US there are groups known as OPOs, or organ procurement organizations. They’re the groups that are out there when someone has a car accident. When an organ is becoming available, they’re there at the hospital to be able to help instruct removal of the organs. Those organs and the data about the donor is sent up to Virginia to UNOS. It’s then used to match against the lists that are maintained by UNOS and then it propagates out to the appropriate center in the region where that organ is available.
If you’re on the list and not sitting by the phone at that time, I guess you could miss your chance.
To a certain degree, yes. We were visiting with customers last week in the state of Florida. They were talking about what the transplant coordinators do and how they use our software to know about the patients and where they are. Often, if there is a separate transplant database, the phone number for the patient or for the closest relative who’s their contact is probably more accurate within the software than it may even be within the hospital registration system. That’s because the critically of reaching that patient is so important.
That’s one of the challenges when you start looking at how you integrate into the environment in the hospital. How are you updating those ADT transactions about that patient information? That transplant coordinator may know better than central registration.
In a short period of time, the company was acquired, you got involved, the name was changed, and then the offerings where expanded to move in to bone marrow transplant and ventricular assist devices. What’s the big picture and what other changes do you see coming?
I think you mentioned two really interesting areas in bone marrow and VADs. The bone marrow product was actually in development before we came in. It’s been a three-year journey to really get that up to snuff. It’s an interesting area. Almost the only thing that bone marrow transplants and solid organ have in common is the word “transplant”, but it’s still the same type of specialty care of looking at very detailed clinical workflow, the need for discrete data, a lot of follow-up for patients that may or may not be local to your environment. The same thing with VAD. It was a logical outgrowth of the solid organ transplant for heart.
The next phase is to continue the work on chronic disease management, like what was here when we came in to the business, but really needed to be expanded. Heart failure is one those things that CMS is going after strongly. I think I saw $7.5 billion over the next four years is going to be taken down from lack of compliance within all of the advanced heart failure programs in the US.
What most people really don’t understand about heart failure is that the heart is usually the last organ to fail. It usually starts with kidney problems or renal failure, peripheral vascular disease, maybe pulmonary dysfunction. All disease states that we help clinicians to manage with our software. Then you start going into the other concomitant diseases of heart failure, which are gout, diabetes, and other types of circulatory problems. All things that we’ve had some level of offering for within the product and that we’re going to continue to expand and work towards.
The future is going to be to help people be able to met their JCAHO requirements around advanced heart failures, CMS reporting requirements, and to help manage those patients. Again, even in an advanced heart failure center, those patients may not be being seen in your clinic every time, every visit. They may be coming from a hundred miles away looking for care. You’re going to try and do that, but they maybe getting their labs locally, they have home health follow-up, there may be a lots of other places with data that you’re going to want to see as a clinician.
Any concluding thoughts?
I think it’s just a really interesting space. If you look back at HIMSS 2012, there was an article that came out from Dr. Antonio Linares from WellPoint, the medical director there, talking about the fact that in the future accountable care world, an EMR may not provide all of that data that you need in order to help the insurers meet their requirement. We think that we provide a solution that fits into a part of that niche. There’s a certainly a need for HIEs to fill another part of that niche.
I think the message that we have — and it’s not just about our software, but a lot of clinical solutions that are out there — is that EMRs are great and they’re going to be important in terms of managing healthcare moving forward and helping us to control cost, but there’s another layer that needs to be there to support ACOs and what it’s going to take to help us really reform healthcare and control cost and really get better clinical outcomes. That’s why we’re here, and that’s why I’ve committed 25 years of my life to healthcare and healthcare technologies.