HIStalk Interviews Bill Anderson, CEO, Medhost

Bill Anderson is chairman and CEO of Medhost of Franklin, TN.

Tell me about yourself and the company. 

I’ve been in business a long time, more than 40 years now. This is my first foray into the healthcare IT business. My background has generally been in the financial area and financial technology. I was about 20 years in consulting, went to be CFO of a large public company, and ended up doing the Internet with a company called Bankrate.com. As I got into technology, I got more and more interested in different types of technology and ended up in healthcare.

We’re a diversified technology company, an HCIT company with enterprise software and some innovative new products. We’re just finishing up our audit, but we think we’ll be around $180 million this year. We’re really proud of the fact that we’ve grown in excess of 20 percent a year over the last five years. We have about 1,000 customers, about 60 percent of in general acute care, but with significant market share in some specialty areas like LTACs, inpatient behavioral, and inpatient rehab.

Even experienced industry people were confused about HealthTech’s multiple product brands until the names were changed to Medhost in December. What took so long to consolidate?

We realize the importance of consistent branding. We had a couple of choices, and so we had to sort through the situations where we could actually get good title to names as well as having the URLs and all the other type of connectivity that you’d like to have. We settled upon the fact that Medhost was the best choice for us. We’ve been very happy with the reception from that so far.

I don’t think I ever noticed HealthTech’s booth at previous HIMSS conferences, but with the Medhost name this year, it was a nice presence and the booth had a lot of activity every time I went by. Did you notice a change?

We did, and thank you for the compliment on the booth. I think that many HCIT buyers did not realize what a comprehensive line we had. When we pulled our different product lines together in the Medhost booth and did some promotion around the new branding, we got some much higher response rates or levels of interest than we had in the past. We were very pleased with the HIMSS conference.

I would assume most people know the company from the EDIS product line that provided the company’s new name. But you have a variety of products, many of them from acquisitions. How do you portray the company’s identity now and how hard is it to support a fairly diverse and extensive product line?

We do have a diverse and extensive product line. It’s come about principally through acquisition, but also some significant organic growth.

We acquired a company called HealthCare Management Systems, which was an enterprise software business, because two of the most important departments in a hospital are the perioperative and the ED. We acquired a company called Acuitec, which essentially was selling the Vanderbilt surgery and anesthesia system. And Medhost, with EDIS.  Today we think we’ve got leading products in these very important areas. Those came in by acquisition, as three pieces.

There are also two product lines that you may have noticed that we’ve built internally. One being our YourCareCommunity platform with our first app that runs on that platform, which is our patient portal. Also, our profitability solutions.We call those solutions because they’re a combination of our patient flow product, our business intelligence product, and a consulting group. We have the full range of the products necessary to deliver a higher profitability to our customers.

Is there sales synergy across these products or do they each have to be sold on their own?

Oh, absolutely. You know, we view ourselves as a distribution company. One of the things that has characterized Medhost is that about 60 percent of our customers are associated with a multi-facility organization. Over the years, we’ve demonstrated an ability to distribute products into our customer base, who are growing rapidly themselves. We have tried to tailor our products — acquisitions and the parts we’ve developed — to meet the needs of that customer base. That’s been a successful strategy for us.

Who are your biggest competitors and what advantages do your products offer?

We view our sales as being a middle market provider in the HCIT business. I would say our principle competitors in the general acute care space would be McKesson’s Paragon and probably Meditech. We obviously see Cerner, who comes down into the middle market with a hosted solution, as well as CPSI, who comes up market with their product line. But as far as direct competitors, we would probably identify those two as the most directly comparable.

What are you seeing as the key drivers of the decisions made by that market?

In our customer base, we think we’ve got customers for which ROI really makes a difference. We have a heavy concentration in the for-profit healthcare business. What we view is that for our customers, a combination of market-appropriate features plus ease of use results in a low total cost of ownership. As a result of that, that’s what differentiates us in the marketplace.

It’s always interesting that for-profit hospitals buy and deploy differently than the not-for-profits. Why do you think that is?

Our customers are not only good at delivering healthcare, but they are very good at running businesses. As a result, I think they’re looking for the effectively the right product for the facility they have. In many cases, we’re in customers that have segmented their bases, and we tend to be in the hospitals and other facilities where our features match up  with what that facility’s doing. And again, we offer what we believe is a low total cost of ownership.

Where does the company’s future lie?

We’re pretty happy with our menu of products for the inpatient world right now. We think we’ve covered bases with that. We would like to do additional acquisitions, because we think our customers have needs, and we’d like for them to be able help serve those needs.

We would be looking at areas like post-acute care. Many of our customers are going to be more and more involved in dealing with patients outside the four walls of a hospital. Also in services, because again those are becoming more and more important to both our corporate customers and our standalone customers. Things like revenue cycle outsourcing, some other types of services like that, we think are going to be very important to these customers as margins are squeezed and they need to be able to control their costs.

Probably the biggest area that we are interested in either building products or acquiring products or partnering with customers is in this YouCareCommunity platform. Essentially what we’ve done is combined an HIE with an enterprise master patient index to allow people to pull records from both ambulatory and inpatient EHRs into the cloud. Using that platform, we’ve launched some initial applications, being our patient portal, and we’re working on a disease management product and some other products. But we’re also looking for partners and acquisitions that add additional applications to that platform.

Is this product the answer to the HIMSS buzz around population health management or analytics, or do you have other strategies or do you even want to be in those markets?

Yes, we absolutely want to be in that market. This would be the platform that we use to address the needs of our customers in that marketplace. 

Population health has a number of different facets. The really important thing, though, would be to help manage the patient, or even better to help the patient manage themselves, to prevent things like readmission, disease management, things of that nature. We think that with our cloud-based platform and our strategy to engage the patient on a regular basis, even when they are not currently in the hospital or have recently been in the hospital, will allow our customers to help affect their downstream cost on those customers.

What are your customers telling you about their state of readiness or state of interest in Meaningful Use and ICD-10?

Everyone is very focused right now on the Meaningful Use program. I think that’s been a challenge, particularly to our smaller, standalone customers. They’re interested in trying to attest as quickly as possible and move on to other things, one of those things being ICD-10.

We view this as being a very difficult transition for many of our customers, and one that we hope we’ll be able to assist them with. We believe we have the right tools in place for them to do that, but it will be a significant change in training and how a facility has to deal with some of their billing and coding issues.

Evidence suggests that smaller hospitals may be walking away from Meaningful Use money after the first couple of years. Do you see that happening?

That’s going to be difficult to do. There will be some in the very small end of the hospitals. We have less than a 100 critical access hospitals in our more than 1,000 customers, and with many of those really small facilities, the economics are not going to work for them.

The cost of attesting and maintaining the Meaningful Use progression is going to be more than the potential penalties or the rewards. That is going to be an issue globally for healthcare, because it is in the best interest of the healthcare delivery system in general for those customers — our customers — of that size to participate, as well as other facilities of that size. That will be an issue that ultimately the government will have to address — how to pool those customers into the system. Because it is going to be difficult.

You are emphasizing a touchscreen user experience in the keystroke-heavy world of healthcare. Do you think that is the market changing to now accept and even demand a touchscreen experience?

Absolutely. While we think of our users as healthcare professionals, they’re also consumers. Every day they use mobile platforms. They use consumer software. Healthcare professionals, like other consumers, are going to be more demanding about the quality of their software.

As a result, we’re making and are continuing to make significant investments in things like workflows, usability of the product, and making it mobile agnostic. Our belief is that tablets will be very important in the medical area. We do have some phone apps and some others that are in process, but inherently the phone apps or smartphone apps are going to be more difficult to use.

Tablets, however, will give the clinician much better access to data and the ability to kind of process data without being tied to a particular workstation or having to sign in and sign out. The convenience and the ability to increase productivity will make that important for all software providers.

Many of the early claims vendors made about mobile access involved Citrix running a desktop session on an iPad. How is the industry is progressing in creating a true mobile experience?

The industry in general has had a lot of demands upon it and has been distracted from some of the work flow and ease-of-use type of objectives that I think are shared by most vendors. Everyone will have to cycle back to that.

Almost four years ago now, we started a renovation of our enterprise systems to put an HTML 5 interface layer on top of it. The reason for doing that is that the combination of wanting to have a more inexpensive hosting solution as well as being mobile agnostic. You can do that an HTML 5 interface as long as you’re paying attention to form factors and how you design a page. Then the same page I can view on a computer, I can view on my tablet and get a very satisfactory experience. Those types of solutions are going to be very important in the future.

What are you priorities for the company in the next three to five years?

Our priorities are to continue to grow our base and our enterprise business, but also at the same time, to take these new product lines that we have in our profitability solutions and YourCareCommunity and to try to meet more the needs of our customers in those areas.

We think in particular, our ability to provide a patient portal in both the ambulatory and inpatient area that is certified and can pull together the care community is going to be a really important thing. We are out trying to talk to as many of our customers as we can about the advantages of being able to build this community in terms of improving patient care, giving the patient better ability to manage their own care, as well as keeping revenues within the network.

Do you have any final thoughts?

There’s a lot of changing coming and has been coming in both the healthcare provider industry and in the healthcare IT industry. With change, there’s always opportunity. Our goal is to try to take advantage of that opportunity and return as much benefit to our employees and shareholders as we can.