HIStalk Interviews Jonathan Baran, CEO, Healthfinch

Jonathan Baran is co-founder and CEO of Healthfinch of Madison, WI.

Tell me about yourself and the company.

The fundamental problem in healthcare is there is far more work than there are people to do it, particularly to care for patient populations. Healthfinch closes that gap by automating routine work that’s associated with patient care. We accomplish that with software that sits on top of electronic medical record systems.

The company is just under 50 people. About half of those folks are based in Madison, Wisconsin. The remainder are remote all across the country. We have 5,000 physicians on our platform and 1.5 million patients that we interact with in some form or fashion each year.

Do you worry that EHR vendors could add similar functionality to their core product?

A core premise of the business is that the next wave of healthcare IT will be built on top of electronic medical record systems. I started a PhD at the University of Wisconsin on building tools on top of EMRs to automate work back in 2009. At that time, it was particularly crazy to think about building on top of EMRs. It just wasn’t heard of at that point.

There has been a significant change in thinking that we’ve seen across the industry. We like to think of Madison, Wisconsin as ground zero for healthcare IT. Now you’ve seen every single EMR vendor open up and start to support companies that are not directly competing, but are doing ancillary things to improve their functionality. I believe it started with Allscripts and Athena and now Epic is part of the game.

While there’s a whole bunch of things that EMRs do, I think they are coming to the conclusion that there are far more smart people outside their organization than are in it. The more that they open up their platforms to enable people to do cool things on top of it, the better for everyone, their customers and the vendors themselves.

Healthfinch products are offered on the third-party app marketplaces of Allscripts, Athenahealth, and Epic, so you are relying on their openness and ongoing cooperation. What’s the benefit and the challenge of working in those EHR vendor marketplaces?

It’s not always easy. We knew early on that if we wanted to introduce technology to support providers in any way, it was not going be via a separate user interface or something that caused you to get outside of the EMR workflow. It was going have to be contained in the EMR for it to make sense.

We started this company with the premise that if the electronic medical record doesn’t exist, then we don’t exist. We don’t have a standalone system. We only exist in those EMR markets. That puts us in a unique position.

Certainly there have been challenges over the years. There’s been a big shift in thinking from how companies like us integrate. There was a dominant way of thinking a while ago that HL7 gives you everything you need. But when you start thinking about the world in the context that I just proposed, an API-driven approach needs to be much more prevalent for that to become real. There’s been a change in thinking and technology changes that have come along with it. We’ve had to follow that wave.

The market is not used to buying from these marketplaces. There’s a whole bunch of reasons for that. But you’re starting to see vendors promoting openness a lot more, because they understand it as being a key piece to the business moving forward. They need to talk about their innovations, the cool companies that are sitting on top of them that are doing things that are interesting that might not otherwise be possible. That’s creating a lot of market awareness, but people aren’t used to buying in this sort of way.

You’re going to see this follow a similar trajectory to what you’ve seen from other enterprise systems like the Salesforces of the world. It will take a few big proof points to prove this, but they will come. It’s just a matter of time now that the EMR vendors have started to embrace it.

Can you assume that those EHR vendors will promote your product? Do they have the right incentives — i.e., financial — to do so?

At least in our experience, all the EMR vendors have financial incentives in the form of a revenue share that makes them align with your business. From my perspective, that’s good thing. I want them to be financially aligned enough to make sure they’re moving in the same direction.

In terms of how they help, how each EHR thinks about that, you get slightly different responses from their teams. In some cases, it is a direct promotion. Sometimes they identify a customer that has a high need for what we offer, and they say, “You should check out this company XYZ on our marketplace.” That’s awesome. That’s great. That’s a great way for us to get visibility within the market.

In other cases, it’s more indirect. For better or worse, all these marketplaces start as just, “Look at all the companies that we have.” More and more they become embedded into the way that organization thinks about doing business. But that’s a many-year transition for these companies, so for the ones that have been there longer, you see more of it. It’s a progression.

How do you decide which areas are ripe for third-party innovation and how much effort is required to turn that into a product that works across multiple EHRs?

Identifying areas of market need comes down to understanding your end user. How they think about the world and the challenges that they face day-in and day-out. We have a strong perspective of that at Healthfinch, which is that there is far too much routine work that is overwhelming providers and their staff. That is the premise around which we think about the world.

The question is that, within that broad context, what are the specific use cases or pain points that are causing challenge today? I place an emphasis on the term “use case” because far too often, startups in particular go in with solutions that are general. They are referred to as general platforms or general purpose solutions that are pitched as, “We could solve a bunch of problems for you.” But in reality, you need to be selling use cases to your end users because that’s what will resonate.

Really quickly, the challenges become apparent. Then to the broader point of that, translating that to other EMR contexts and specifically within the EMR — that is definitely a big gap that we see. I’ve never worked at Epic or an EMR company. A number of folks in the company now do or have in the past. But the understanding of these rather complex workflows is a big barrier to innovation right now.

Take the broad concept of automating prescription refill requests. That sounds simple on the surface, but once you start digging a couple of layers down, you realize the complexity. It’s not always easy to uncover that complexity. That’s a big challenge that I think a lot of these EMR companies have. How do I take an idea and turn it into something that works at the highest level? But also something that works day-in and day-out with what we know are the challenges of healthcare IT today?

The good news is that the general themes will hold across all EMRs. The same problems you face are pretty consistent between EMRs. But there’s always that little bit of nuance that’s specific to each of them. It’s a challenge, but if you can get in there and figure it out, it represents a competitive barrier for new entrants.

How do you coordinate and test EHR changes and make sure the customer isn’t straddling incompatible releases of their product and yours?

When we are integrating with these EMRs, they are making an either implicit or explicit promise that their integration points are going to hold from version to version. So in most cases, that’s abstracted away from us and not something that Healthfinch has to worry about. We just have to make sure that we are consistently working with the SLAs that we have with those third-party vendors.

That isn’t always the case, though, and it doesn’t always hold true. I can tell you that five years ago, it was much more of a challenge from release to release. We had to double- and triple-check to make sure that wasn’t the case. That has smoothed out considerably over the last couple of years. It has more tried-and-true process associated with it as they’ve become more used to working with third parties.

Some EHR vendors are well known as having zero interest in working with third parties or offering open access points to their product. Can those vendors continue operating by walling themselves off?

I don’t think so. For the last couple of decades, there was certainly an argument to be made for the highly-integrated electronic medical record system that didn’t work with third parties, working strictly within the four walls of that organization. What’s happening now is that healthcare is becoming far too complex for just one company alone to solve all those challenges. To a certain extent, you’re facing the classic innovator’s dilemma. The approach that has allowed you to win in a previous business environment is the same approach that will cause you to fail in the current context if you continue along.

Will there be some holdouts? Sure. Will it be challenging for those folks? Yes. As these open platforms become more prolific, as customers use third parties and see the value and that these companies that are narrowly focused in given niches that can do a lot more than a company that has to build towards a lowest common denominator, as they see those proof points begin to emerge, those third parties are going be important to their business and how they run things. That’s not to say that that change is going happen overnight, but it’s a fundamental tipping point. A lot of the major players have already made that transition, so it’s only a matter of time.

Where is the company in its growth trajectory and where does it go next?

We are still very much in the growth phase, on the heels of some of these app stores that have come into existence. In the case of Epic in particular, it went live in the last quarter and we’ve seen a nice uptick in business associated with that.

For us, it’s the mindset of going out and growing the business in those areas that you identified. We last raised funding a couple years ago. We’ll be doing a little bit more fundraising, but then we’re driving towards building this thing into a big, profitable business moving forward.

Do you have any final thoughts?

I am truly excited about the time that we live in right now in healthcare IT. The type of change that I mentioned at the beginning has only become possible to build because of the introduction and the adoption of these electronic medical record systems. For the first time in the history of the world, we have an opportunity to drive some incredible change for healthcare systems, physicians, and for patients. So much is changing.

We are at this defining point in the industry’s life cycle. I’m excited to see the innovations that come out Healthfinch, obviously, but also in the industry at large. There’s opportunity everywhere to drive significant improvement.