HIStalk Interviews Huy Nguyen MD, President and CEO of Cogon Systems, Inc.

Readers asked me during the HIMSS conference to check out Pensacola, FL-based Cogon Systems, Inc. I was vaguely aware that the company was doing some Florida RHIO work, but that was all I knew about them. HIStalk readers are talented at sniffing out up-and-comers that have the potential to be disruptive, so naturally I was up for learning more, even though I never did arrange a HIMSS rendezvous.

President and CEO Huy Nguyen was agreeable for a chat when I e-mailed recently. I appreciate his taking the time to give me some background on the company and to peek inside the mind of a Navy doctor turned entrepreneur, which I found fascinating.

First, help me pronounce your name and that of the company. Is it Hyoo NWEE-un?

Yes, and the company is pronounced COE-gun.

Tell me about yourself and Cogon Systems.

I’m a physician by training and I still practice part-time in the emergency environment. I like it because, at the end of the day, what we do in healthcare as well as in business has to translate to better patient care. It’s nice to continue to focus at a very trench level on what the end game is about.

I was a Navy physician. I became immersed in HIT because growing up as a military doctor meant cutting my teeth on an EHR. I always assumed that the market had systems as robust as the military’s systems.

Being an attending physician in the Navy, I was taught that, if you want lab results, you don’t go to the chart. You go to the computer and look it up. You certainly don’t query someone else to look up your data. Sometimes a doctor’s idea of an information system is to ask a nurse or clerk to bring up the information. In a naval career, you couldn’t ask that nurse because she might be a commander and you might be a lowly lieutenant. You knew better than to use her as an interface to your information system.

The Navy, early on, was an early adopter of new technology. One of the things it adopted early on was PDAs. In the early Palm and Handspring days, we bought into it hook, line, and sinker. At Naval Hospital Pensacola, the commander bought all the doctors PDAs. With your taxpayer dollars, I became enamored with the idea of mobile healthcare.

Those were glorified toys at that time. You stored everybody’s beeper and your calendar. That planted the seed in my mind – wait a minute, should this be an interface to the clinical data, just like the desktop was to the military’s CHCS clinical system?

I broached the idea of a mobile interface to clinical data with a friend of mine named David Hsu. We built a prototype and took it to the military. In typical bureaucratic fashion, they asked, “Aren’t you a doctor? Why are you building prototypes in your off hours?” They didn’t allow us to take it to the next step.

David and the engineers took it to Sacred Heart Hospital in Pensacola. This was in the pre-HIPAA era. Today, they’d laugh you out the door for asking for access to live data to build a system. They thought it was great that young engineers and I were interested.

The engineers took a prototype and brought it to production level. Once they had a working product, it was up to me to decide about my involvement with the venture. The guys approached me about running the thing, even though I didn’t come from a business background.

My wife and I thought about it. The military sent me off to Iraq in 2003 in ground support for the Iraq war. There’s nothing like war to make you a risk-taking entrepreneur. After seeing the fighting, I told my wife, “Heck, let’s go for it.”

I left the Navy in 2003 and took Cogon to the marketplace. At that time, we were mostly focused on mobile technology. We had to learn to integrate back-end healthcare systems, focusing on clinical systems. We became adept on variants and flavors of HL7. To stage the data to our mobile platform, we created a CDR.

We had a bunch of guys so focused on the mobile interface that they didn’t realize they were creating a robust back-end world. As we grew, we realized that the value isn’t moving clinical lab results or exposing them to front-end PDAs. The potential value is all the back-end stuff we did and the ability to integrate it into a comprehensive CDR.

I started to realize the true value of what we did. What about the possibility of integrating data from multiple providers? We became early thought leaders in Florida on health information exchanges. We grew our technology and moved way from an enterprise level platform to a Web-based platform.

We have a contract in South Florida and have integrated eight clinics, Mercy Hospital, and soon Jackson Memorial. We take data in HL7 or CCR formats and store those data in separate accounts. Once they’re in those repositories, we have a record adapter service.

We have a service-oriented architecture. We’re able to take data and adapt it to CCR and then move data within our own platform. Our Web portal is almost treated like a third party application. We don’t care which application we’re working with.

In the past four years, we’ve taken a mobile enterprise play and migrated to back-end clinical data integration and now have gone completely Web-based with it. We’re keen on SOA and standards like CCR. Hopefully, we can create a Web-based milieu and can launch potential other partners off that platform.

We’re not a RHIO company. We don’t send sales guys out to find RHIOs. Interoperability, especially with ONCHIT, is too much about RHIOs. A community is defined in different ways.

How is the Moment of Care product different than the usual physician portal?

It’s unique because it has the ability to give the end user control. In Miami, we have funding to establish information sharing between military and civilian providers. The portal can pull disparate records into a cumulative view. It also allows a provider to titrate how much data he wants to view.

Let’s say we have robust RHIO and a Nationwide Health Information Network. Let’s say the user can turn on the fire hose and we can bring in that patient’s clinical data, local and from all around the country. You’ll have to comb through that to make an assessment and plan. We drive our end users to an encounter-level screen to show what they’re interested in – a visit or a lab visit. We bring in the in-depth clinical data from only those encounters. So, what’s unique is the ability to leverage the Internet and control what the user wants to see.

Some would say that physician portals are obsolete in an era of interoperability, where information should be placed directly into EMR systems instead of just being read-only for those who go out looking for it. Do you agree?

I agree. It’s our plan as part of our continuing development. HIS is moving so fast that you always have to stay ahead of the curve.

I’m in complete agreement. I’d love to get to the point when the only people who look at our portal are those without EHRs. We serve as a true data hub. We take data from our trading partners and parse out data based on defined rules to entities that are authorized to take the data from us, consume it, and transiently display it in their own system – electronic health records, disease management, pay for performance, whatever. We would then supply data to those applications.

Once you create a good interoperable platform, it’s not just the Cogon portal. They key is to create a milieu that can grow a wide variety of value-added applications.

As a small company, how can you market and sell your product?

We think of ourselves as a healthcare interoperability solutions partner. One of the things we do that allows us to compete in our regional markets of focus is that we look at ourselves as a partnership. We have a cost-effective application platform that allows people to integrate into the exchange and from there. We are keen in almost liberating the data in a secure manner.

We’re pretty flexible, being privately held, on the best business model that fits a particular community. Is our platform a shrink-wrapped package? Yes, but what are we going to do with it and what’s the endgame? We spend time helping client figure that out. We don’t go into a relationship and say “This is what our package does.”

In South Florida, that community and the folks involved in that RHIO were very forward-thinking. Think of your major metro areas. I don’t think there’s a consensus yet or even close on sharing health information. Miami is quickly coalescing around this. We were fortunate to be early thought leaders. From the get-go, the RHIO has always gotten a sense that we were more than a technology vendor, we were a partner in the deal. As long as I’m running the company, that sense of customer relations will be part of our way of doing business.

A lot of companies are committed to the RHIO vision. Some of their commitment is not straightforward. Others are committed, but don’t have the wherewithal to get the job done.

Earlier versions of the company’s web page list a co-founder and several other executives. Has the management team changed?

Companies, certainly entrepreneur efforts, go though phases of development. The first phase is all about the vision, the conceptual idea and the visionary leader’s hopes and dreams. It was mobile technology in healthcare.

Then, you go to the prototype phase, where you get something to work. Then, the initial market phase, where you have no clue what the market wants, but you think you can teach it what it wants. That’s completely ineffective.

At some point, you go through a process phase, where you realize your prototype isn’t scalable to production level, and the market is telling us our true value is elsewhere. In our case, the market was telling us our mobile technology was gee-whizzy, but it was our integration they wanted.

Then, you reach production. You’re not prototyping any more. You’re delivering the product plan.

Then, you reach nirvana – churning it out, being good partners, delivering on a tight timeframe. Execution is incredibly important.

We have undergone personnel changes as we entered the different phases. As a physician, I realized that it’s great to have clinical knowledge and insights, but at the end of the day, if I wanted to keep running the company, I had to evolve. Vision is great, but execution is better. Was I a manager or a doctor who happened to run a software company? My job is to be a great manager. I have evolved and changed personnel to evolve. The processes for prototyping to delivering widgets is a totally different mindset and sense of purpose.

From the perspective of both headcount and the bottom line, we’ve grown nicely. My #1 growth need is good people who want to work in a culture of quantifiable accountability. This is a company where we are very metric-driven. It’s transparent and achievers are rewarded. I’m looking for developers and sales and business development people.

When I Google Cogon Systems, I get an ad for Patientkeeper. Is that surprising?

That does surprise me, but I think people still think of us as a mobile technology play. A lot of us have realized that mobile technology itself is not a sustainable model. We started to make the move away from being a pure mobile technology play in about a year and a half.

Managers don’t bury their heads in the sand. If you’re a good manager, you read what the market is saying, not what you hope the market is saying. For a lot of us purely focused on mobile technology, too many people hung in there thinking it was going to be rampant when that’s not what the market was seeing.

We haven’t given up on mobile technology. We have a project with the Army on mobile technology on our common Web-based platform, so we’ll continue to drive the possibility of mobile technology of healthcare. You just can’t base your whole business model on it.

The iPhone is just the beginning. This is the second or third inning in mobile technology. In healthcare, we’re in the first inning. It has a very promising future in healthcare and we’re interested in driving value-added solutions from our health interoperability platform.

You were a Navy physician before starting the company. What do you like and dislike about being an entrepreneur?

I dislike, as is typical as someone from a physician background, that things never happen as fast as I’d like to see them happen. The great thing about medicine is that there’s always a conclusion at the end of the day. In business, I learn every day to be patient.

Like South Florida. The people who audit the project would say it’s impressive what we did, indexing live data in six months and in production use. For a lot of people, that would be a fairly rapid implementation. Six months for a doctor is still a long time. Sometimes I find that frustrating.

I’m frustrated both as a doctor and as someone on the technology business side that we’re not as sophisticated as other sectors, like retail and banking. I see much greater interoperability and the power of the Internet. I’m involved in healthcare as a provider and as a technology provider, and at times it hurts me that we’re dealing with people’s health, more important than banking accounts, and we’re not as sophisticated.

What’s exhilarating is that drive for greater performance. If you’re a good company, it takes on a new life of its own and it’s greater than any individual component. If I’m not the best manager, Cogon will replace me. The challenge is on me to keep up with the growth of the company.

That drive always to be bigger, better, more profitable … it’s never enough. You can go talk to the CEO of GE and he’s in the same boat. You can make 10,000 times Cogon Systems, but he and I still share the same fundamental drive – how can I be better and bigger tomorrow?

Executing as a team. Medicine is an individualistic endeavor. If you come into my ER unresponsive, I’m not going to survey my team and ask if should start CPR or intubate you. I’m going to tell people what needs to be done and we’re going to get to it. It’s exhilarating motivating people toward a common goal and delivering it. That’s the most rewarding aspect of business. We’re at the stage of execution and we have an advanced platform, but at the end of the day, what are we going to do with it for a particular client, on time, as promised, and as defined by cost.

What’s the five-year plan for the company?

I’d like for us to be the leader in healthcare interoperability solutions at either a hospital level or even a community level. I’d like for us to be extremely competitive in using the best of the Internet age and the best of creating an interoperable world.

Just as importantly, we’re looking at creative business models to facilitate people getting into this interoperable world, with minimal cost to get on board to trade data as a community. Creating an environment where we have a lot of partners that can drive solutions off that platform, with a whole host of companies that use our platform to create disease management modules or take our data and present it inside their EHRs and facilitate better patient care.

Finally, as a physician, my hope is in five years that our technology has very direct implication on patient care and a more sophisticated, empowered consumer.

What healthcare IT people and companies do you admire?

I particularly admire GE across the board. I think GE always has that drive to be bigger and better. If you’re in this business, your goal is how to serve the market better. They have a diverse portfolio and their ability to manage that diversity is incredibly impressive to me.

What could we do better as an industry?

I would like to see a greater level of consensus and collaboration of emerging standards or a drive toward an interoperable world. We still have a tendency to think about “our solutions, our clients, our turf”. I’d like to see us make greater inroads to lead the charge to facilitating patient care with an interoperable stance. I’m glad the government is leading the charge, but we have to decide if we’re a market or a government endeavor. I’m a proponent of healthcare as a market and I’d like to see the market take the lead in driving the issue of interoperability.

As a doctor and someone in business, what are your thoughts about the role of HIS in healthcare as a whole?

We ought to be clear to the healthcare market and the country and political leaders. There’s a lot of inefficiency and we know it. But, information technology is not the panacea to the underlying healthcare issues.

As a doctor, one thing that always concerns me practicing in the emergency environment is, “Does the patient have access to care and can they afford care? Can they afford a $100 antibiotic, do they have insurance?” No matter how good our common dream of an interoperable world, it doesn’t solve the basic problem of whether that patient can afford the antibiotic.

When I see during the selection cycle using health information technology as a possible panacea, I think it diverts people from some basic underlying issues. Is it a right or a privilege? If it’s a right, how do we pay for it? If it’s a privilege, how do we help people who can’t pay for it? If we’re thinking about HIS as a means to improve cost containment, that’s one thing, but if you’re focused on that as a way to solve the overall problem, you’re being completely disingenuous or naïve.

HIStalk Interviews Ken Creager, Sr. Dir. Strategic Markets, Meru Networks

A long-time reader whose background is clinical suggested I talk to the folks at Meru Networks. I figured it takes a lot to get a clinician excited about IT nuts-and-bolts stuff, so I was happy that Ken Creager, senior director of strategic markets for Meru, agreed to chat. I hear gripes regularly about wireless networks, even with the relatively modest demands placed on them. I was interested to learn more about what’s changed in the time since many hospitals put up their first 802.11b network. Thanks to Ken for the conversation.

Tell me about Meru Networks.

Meru has been in business since 2002. We produce a family of access points and controllers for mission-critical and life-critical environments. The company is headquartered in Sunnyvale, California, with operations in all of North America, Europe, Asia, and R&D in Bangalore, India. We’re not public so we don’t provide financial numbers, but we’re about 280 people, growing at a very rapid pace due to a lot of industry demand. We’re having a great time trying to respond to the needs and requirements of the field.

The lion’s share of our business is in the healthcare and education markets. In healthcare, we solve unique problems as a result of doing a lot of observation in the marketplace, getting assistance from people, and from our participation in HIMSS. We don’t always go in and talk to the technical people.

We look at the nurse as the integrator. If the technology is going to work, it has to be easy to use and functional to a nurse. If a nurse is using a PDA at the bedside, that person doesn’t really care if it’s the applicaton, the unit, or the wireless network if it fails. We work closely with our clients and our partners to make sure we’re very functional for the clinical staff in hospitals.

What’s the penetration of wireless networks in hospitals and how are they being used?

The actual penetration is close to 80%, but let’s clarify. Many of those deployments are first- or second-generation, with fat access points that are difficult to configure and lots of cost. They also tended to have been installed for a single application or department, like something radiology or oncology wanted to put in. It wasn’t pervasive until recently. Most hospitals report that they have some use of wireless, but it’s not pervasive.

What we see happening is an absolute explosion of applications. Go to HIMSS or trade shows and you’ll see applications and devices using wireless as a transport. There was a time when wireless was nice to have, like in the conference room. Today, it’s an integral part of the architecture and an enabler for taking care delivery to the bedside.

We spent a lot of time looking in hospitals and saw this snowball of applications coming at clinicians, but found that networks aren’t pervasive or are limited in their capacity and are failing. Those first implementations may have worked well for an application or two, but with 15 or 20, they are failing. Adoption of devices is not being as well-received as it could have been with a more robust network.

That has given us a window of opportunity to come in and show how our technology is differentiated in the marketplace. We have better coverage and performance and can prioritize traffic to assure application delivery. Let’s say we have a Wi-Fi based phone and we want to make sure that calls get through ahead of someone in the back room who’s Web surfing. We can inspect that traffic, prioritize it, and makes sure it gets through. We have quality of service built into both the upstream and downstream.

A great application of pervasive wireless that we have witnessed first-hand are nurse-type devices like Wi-Fi based phones or Vocera-type badges. You see clinicians walking the hall with those devices. We noticed they stopped walking. They told us it was because they had a good signal and stopped so they wouldn’t lose it. We’re in the mobility business and we asked whether that makes sense. We’ve seen areas where good coverage was marked on the floor with tape. That’s the pervasive element. Is if through the entire facility? Not yet today. We’re getting there.

Common problems in hospitals include dead zones, slowness, and overloaded access points. How does your technology address those problems?

Wireless runs on a series of channels, usually 1, 6, and 11. Access points have different channels and you roam between them, much like when you’re on the cell phone in your car. That inherently causes problems in your end device because it has to continually look to figure out which one of these guys it wants to talk to. At some point, it’s talking to two of them and has to decide how to hand off.

RF planning is required to determine how access points in a general area interfere with each other. Also, as devices move, they have to decide which way to go. If I’m trying to talk to two different access points to determine which is stronger, that’s taking time on the network. Our advantage is that we can put all our access points on a single channel. The end user device sees it as one big network.

There’s no handoff. We make that decision for the end device in our controller. If you’re walking between 15 access points, that entire campus may be on one channel and you’ll never know it’s happening. The advantage is a four to five times performance increase because you’re not asking questions where to go next. Also, it’s seamless between access points. The opportunity to drop a call or device is almost completely negated.

If you think about what’s happening with clinicians walking down the hallway and looking at vital signs on the laptop and they hit a dead zone, they’ve lost information. We take that away because our coverage is more pervasive. We have quality of service upstream and downstream and we guarantee delivery of those packets for critical devices like a patient monitor or voice call. We can assure the delivery of that piece of information.

This all plays into clinical adoption. We’ve seen the reports come out. In the 100 Most Wired, technology today is having a positive impact on health, safety, security, and mortality rates. Much of that’s due to the deployment of technology solving errors at the bedside, medical conflicts, wrong medications, those kinds of things.

Another key thing we find in hospitals is that they’re amass in assets – wheelchairs, infusion devices, phones. The biggest question is “where are they?” COWS and crash carts move to emergency situations, congregate around nursing stations, and then get pushed into the hallway. We can do some locationing with our management software that lets you determine where those devices are.

Because we’re able to do a single-channel architecture of the standard 12 channels, that gives you 11 available. You can stack channels like a stack of pancakes. You can segment your traffic. As an example, you could put voice traffic on Channel 1, data on Channel 6, and telemetry on Channel 11. That increases your capacity on the network and segments them. They can still talk to each other.

Because we don’t have channel conflicts, when you need more coverage or bandwidth, you don’t need more RF planning. You plug in a new access point, it figures out what’s around it, and it becomes part of the community. That’s a low cost of ownership.

Hospitals spend as much upfront with our competitors doing surveys and channel planning as they do on the actual product. We can almost eliminate that. You don’t need as many of our access points to get the same or better coverage as our competitors. The cost of an access point may be equivalent, but you don’t need as many.

When you look at a clinical environment and recognize that a critical care nurse will take 1,000 data points in a shift and there’s five or six of them trying to do something and they congregate, do they have the bandwidth to get their job done? As they move out on the floors, do they have the quality of connection to get their job done?

Also different is that we have an ability to create fairness in the networks. That offers us the ability to do backwards compatibility. You have the b-rated radios that operate at 11 megabits per second. The g-rated ones are at 54 megabits per second. If a guy comes in to your g-network area with a b device, everybody goes down the lowest common denominator. Everybody gets slowed down because of that guy.

We can give all users their full capacity at the same time. We can offer 802.11n megabits, but still allow g and b clients to work on the same network together. In many industries, but especially true in healthcare, devices stay in service for many years. They’re not going to rip out technology to replace the radio cards. That gives us an extensible architecture and investment protection for existing clients.

Describe 802.11n and what impact it will have on healthcare.

It’s the next generation of speed. It will give you six fold the bandwidth of 802.11g. There’s a lot of technical stuff around that, but from an end user perspective, you’re bringing true desktop wired speed to the wireless world.

Most connections to the desktop are 100 megabits. You’re going to have wireless signals that are three times as fast. If you’re building a new facility, do you need to put those wires in place? You can go to the all-wireless enterprise and have speeds faster than that of the wired world.

In healthcare, most of the devices we see are operating very well at b- and g-rated speeds. Ascom has a great g-rated phone purpose built for healthcare with messaging and made for clinicians. On your hip, the display is upside down so you can read it without using your hands. The next generation of phones will have n-rated radios, so you can have more of them out there.

The biggest impact will be in imaging and video. Today’s early generation networks don’t have the capability to take full-motion video or large images. In a shared PACS environment, you might need to look at large images in real time. 802.11 n will allow you to do that.

How important is wireless voice over IP to hospitals?

We’re seeing it as becoming a much bigger element. They view the network as being able to carry everything. We’re seeing dual-mode phones – cellular outside, Wi-Fi based inside. Doctors look like they have Batman utility belts with 15 pagers and devices. You will continue to see an explosive rate of devices coming down and then a convergence period. Blackberry is coming out with a dual-mode device.

Voice is becoming a much bigger element of these networks in healthcare. In many cases, it’s the driver for upgrades. Then, you get into, “What’s the quality of the call? Is it comparable to toll grade? If a bunch of users make calls, is the network degraded?” We have technology that protects the quality of those calls.

What patient care quality issues can result from ineffective wireless architecture?

Time. Let me go back to the nursing station to see what’s happening. If an application is readily available on a tablet PC, laptop, phone, or multi-use device, you’ll save time. The opportunity for errors is reduced. Where you find a low adoption rate of handheld devices and point of care by clinicians, you find higher error rates. Those have an impact on care delivery and quality of care.

If I’m a hospital CIO, why shouldn’t I just buy Cisco like I’ve always been doing?

Cisco has a great product. I used to work for them myself. But this technology is truly differentiated. When you look at a Cisco product, you have no single product in the top five. You’re not really getting best-of-breed in any segment.

We use Cisco products in our demos. We can make their wireless phones work better than they can because our wireless network is so robust. Our technology is extensible and backward-compatible. There are no forklift upgrades. Once you’re set up, you just stick an access point in the ceiling.

CIOs have multiple vendors and multiple levels of code. With us, you have one level of code that runs all controllers and access points. The controller code is broadcast out the access points. You set a corporate policy for HIPAA or JCAHO or whatever is required. Let’s say you allow a certain number of guests, but you have to keep them away from the business office and lab. You set those central policies and the access points come online, assume those rules, and apply them universally across the network however you’ve set it up. Once you’ve set it up, you don’t have to do it again.

We can also suppress rogue access points. Somebody runs down to Best Buy and buys a D-Link box and plugs it into the wall. Suddenly you have a new wireless hotspot with no security policies applied to it. Somebody in the parking lot has access to your network. We have rogue detection.  We determine it’s there and don’t let that person come in. We go one step further. Once we recognize that the access point is there and it starts to broadcast, we jam the signal. That keeps devices from taking time away polling the access point. I see that guy broadcasting, I’m going to jam the signal so the end devices never see it and can’t take up bandwidth.

How do you justify the cost of your technology to a hospital that already has a wireless network?

Does your existing wireless network have the capacity to deal with what’s coming? Most tell us no. People with a network in place for 18 to 24 months are having to replace it because of the applications coming. They have to put in an extensible one for the next speed or the technology required.

The advantage we have is that most have already come to the decision that something has to change. We come in and say, “We can solve a lot of these problems with coverage and speed and ROI and save you money as compared to the other vendors, and provide you a better of quality of service.” Our value proposition is strong. Clients are feeling the pain by finding low adoption rate by clinicians on new devices. The end user doesn’t know what’s behind it, it just doesn’t work. We try to build the most robust infrastructure at the lowest cost to make sure those applications work.

Cisco convinced HIMSS to create The Community for Connected Health, which seems to be a thinly disguised Cisco trade group that paid HIMSS for exclusive access to its members. Does that make it even harder to complete against the Goliath?

What’s interesting about that … they did that with HIMSS and had tried to do the same thing with the AMA, who pushed back and made Cisco take down some of their marketing. A week later, Cisco announced their endorsement by AHA. Everyone I’ve talked to on the client side and vendor side says this is an abuse of .org facilities and people. The industry is policing that themselves.

I’ve instructed my team to not even respond to those questions because it’s how Cisco markets today, defensively and protecting their ground. Frankly, I’ve talked to folks like yourself who view that as very offensive, “Cisco has infiltrated HIMSS and I can’t believe HIMSS any more.” I think the industry will self-police that. People who have drunk the Cisco Kool-Aid will buy it no matter what. For those wanting a best-in-class solution, I don’t think them doing that with HIMSS or AHA will influence them in making a purchasing decision.

Wi-Fi companies seem to have had mixed IPO success. Meru was considering IPO this year. What’s the most likely outcome?

We are going through a rapid growth spurt. We just tripled the size of our sales team. There have been some successful IPOs, some not so good, some consolidation. The opportunity for us to move forward and grow this company is excellent. There’s a lot of opportunity out there. We have a disruptive technology. I’m sure the company and its founders and its venture funding would like to see us go out. I’m not privy on whether it’s this year or next or whenever, but when it’s time and the market dynamics are correct, I’m sure we will go out.

Any final thoughts?

Our wireless technology is unique. We’re fully standards-based and we help drive a lot of those standards. We’re innovative in our technology. You’ll find that many if not all of our customers are raving fans of what we do. We have very large hospitals like University of Miami, Wake Forest, and St. Johns. We continue to add and grow in this market almost on a daily basis.

We’re something of a positive disruption. We’re getting a lot of positive write-ups and are getting attacked by people you’ve mentioned [laughs]. When we’ve reached the point we’re being attacked by Cisco, that means we’re a thorn in their side and are disrupting their business. That’s good thing.

The challenge is getting the word out. We’re a small company compared to Cisco. We only do wireless. Customers are benefiting financially. I’m happy with where we’re doing. We’re focusing not only on the IT buyer, but how the products are used by the clinical staff. As we well know, doctors walk in with a great application they found or something they use that they want you to support. We’ll see more and more of that. Having a network that is extensible and easy to add capacity to will have an amazing capacity on the IT staff of hospitals and the budget.

HIStalk Interviews Vince Ciotti, Principal, H.I. S. Professionals LLC

Photo: Healthcare Informatics

My IDN employer brought in Vince Ciotti and H.I. S. Professionals for consulting work years ago (at my urging) and he did a good job. He’s definitely a free-spirited rogue in a button-down world. Maybe the best testimonial to his skill and outlook is that he did all the IT consulting for The Hunter Group, which may have been occasionally reviled for telling hospital executives hard facts they didn’t really want to hear, but who told them nonetheless.

Vince definitely knows his IT history because he lived it and made it. He’s one of those pioneers who hooked on for a ride as the industry got started in the late 1960s, but here he is still working in it nearly 40 years later. Thanks to Vince for the chat.

You and your fellow H.I.S. Professionals founders left good jobs to strike out on your own. What did it take to make your business successful?

We were all fired. You get into consulting because you lose your job. I was fired outright. Bob Pagnotta got sick and tired of taking companies public and dealing with vendors. Karl Sydor had been with SMS and was sick of apologizing to customers. So, two of us weren’t really happily and gainfully employed and Karl had been out on his own. I can’t see many sane people leaving a good job and striking out on their own.

What’s it like working for yourself instead of someone else?

It’s a blast. I spent 15 years before the mast in various positions with vendors. The first 10 years with SMS were wonderful. It’s like Judy Faulkner when your company is hot and everyone loves you. When you get big and it’s a 1,000 person organization and customers get unhappy, it goes downhill.

I went to McAuto and a little in vendor in Brooklyn. I admire a guy who can spend 20 or 30 years with a vendor. I got sick of it after 15.

If you had to take a job with a vendor, who would you want to work for?

At this stage in life, nobody. I’m 62 years old and I’ve got four more years to bag this stuff. It’s fabulous. I’m standing here in my underwear because it’s hot here in Santa Fe. I usually go out on my motorcycle and the come home and take a nap. I’m usually having a drink by 4:00 or 4:30. When I travel, I have to wear clothes and stay up until 6:00.

I’m going to take two weeks off in a motorhome and go to Yellowstone. I won’t make a dime. I called my clients and told them not to call me. I could do it all year if I wanted to. You eat what you kill.

I love it, but to be candid for your readers, don’t jump into it short-sightedly. Bob Pagnotta was the golden man. He was loved as a vendor in the ’70s like Judy Faulkner is today. When he went out on this consulting binge in 1987, he sent out a one-page letter to 27 CEOs he’d served over the years. He said, “I’m sick of the vendor world. If you need me, it’s $1,000 a day.”

He got six responses from guys who wanted a day a week. He was stuck and I picked up the extra day. The power to go out and get those six responses is rare. Without Bob, I’d have starved the first five or six years of the business.

How has consulting changed over the years?

For the worse. It’s bigger. When I started with SMS in 1969, the big vendor was GE, who sold MediNet. They had 500 or 600 hospitals, maybe $40 or $50 million in total revenue. SMS lost money until 1972 or 1973. Vendors were small. Even McAuto had 100 employees and maybe 10 hospitals.

You knew all the hospitals and employees. Those billion-dollar firms today like Siemens and McKesson and Cerner – it’s frightening. It’s a CEO a year. A total merry-go-round at the VP level. Companies buy and sell products like I buy motorcycles. I yearn for the good old days when you knew everybody and they all knew you.

Sheldon Dorenfest goes back 30 years also. He pegged the size of the industry. Probably the total size in 1970 was $100 million and most of that was hardware. Software was embryonic.

In my era of 1969-70, I was an installer and we were free. Can you imagine that today? They called us implementation directors. SMS didn’t start charging for us until the late 70s. It was a different business then. I think it was nicer, but I’m old and jaded, so maybe young kids have a different perspective.

We used punch cards. You sat at a keyboard and punched cards that were sent over lines one byte at a time. When I saw the first CRT – the IBM 2771, I think it was – green lights on a TV screen, no cardboard, no holes. Blew my mind. Typed on a keyboard and it went down the line.

We just had an SMS reunion in March 2007 in Orlando, 50 of the old farts from SMS in 1969. Told old stories. Of those 50, probably 10 are multi-millionaires. They saved their stock. SMS stock was a penny a share when I started and they weren’t public. They gave you 40 or 50 shares for joining and a few hundred if you did well. I ended up with a few thousand shares worth a penny each.

The company went public in maybe 1975 at $15 a share. I’d been given a couple of thousand. It’s what these executives are working for today. Stock options are staggering. It grew and split several times, but I’d sold every share to buy Porsches and Hondas and missed out on probably $1,000 a share. I blew all mine.

What do you see happening in the next 5-10 years with consulting firms?

The ones that go public will have the toughest time, like FCG and ACS. It’s an earnings per share treadmill. How do you grow 15 or 20% a year and still be honest with your client and tell them not to buy certain systems and not be an alpha site? Clients will get angry and then you can’t sell. It’s a vicious treadmill.

A software vendor can come out with new products, charge for them, and make millions. Consultants are “same old, same old”. Help them pick them and install them. How do you get 15 or 20% except by ripping off your client and selling them stuff they don’t need? For a hundred-million-dollar consulting firm, it’s murder.

What are the biggest mistakes CIOs make when negotiating contracts?

Annnouncing a vendor of choice. That’s the biggest mistake. That effectively says “all concessions are ended”. Stupid, like when you meet someone in a bar and look into her blue eyes and say “Let’s get married”. She won’t get married because she thinks you’re weird. You won’t get a prenuptial agreement. On the other hand, tell her you’re going home to a redhead and she’ll do almost anything.

RFPs are a farce. The vendor that lies the most wins. They’re the vendor of choice. You should have picked two winners and then negotiated between the two.

Imagine if your CEO goes to HIMSS and falls in love and tells a vendor he’s going to buy their product and wants you to negotiate deal. How you gonna get a deal? The CEO should tell you he saw some interesting systems and let you lead the charge. Keep the CEO out of the picture as long as you can.

If you’ve ever been a vendor, the salesman’s credo is to sell as high as you can on the org chart. If you can get to the board, do that, but at least get to the CEO. The nastiest ones would try the CFO, and if he wouldn’t buy, he go to the CEO tell him the CFO’s incompetent. You do the same with the CEO if you have to – go to the board.

It’s not the company as much as the sales exec. There are vicious sharks out there that will do anything to get a deal. Glengarry Glen Ross is a classic picture. Getting a guy fired who’s standing in the way of a deal is minor.

Think of the commission check. We just negotiated an East Coast CPOE and clinicals deal worth $40 million. The going commission rate is probably two percent, maybe three percent for the rep, and he’s just the order-taker. The regional VP is probably $100K. The VP of sales, several thousand more shares and maybe a bonus. You’re looking at six- and seven-figure commissions. What would you not do for that? These aren’t immoral or unusual people. They’re just like you and me, but they have far better focus. They’re looking at their W2 every day. We just look at it at the end of the year.

You have a reputation for being an aggressive contract negotiator. Do you have some good stories on things that happened while knocking heads with a vendor’s negotiator?

I hate to print this. The ultimate is that you tell both finalists they lost and you hang up and wait a couple of weeks. They’ll go to the CEO, CFO, CIO or whomever and give them a deal. I don’t care. I tell my clients if you can get more money, do it.

What does it cost McKesson to ship Paragon to a 150-bed hospital in Arkansas? A $2 DVD and a $20 Fedex. Everything else has been expensed in prior years. Maybe you have to buy lots of dinners. Cerner will spend $100,000 on airline tickets. What does it cost to build a Ford or Chevy? Why should hospitals spend 10, 20, or 40 million dollars for these systems?

Meditech’s profit is around 40%. Cerner and McKesson are public, probably in the teens pretax. Maybe the average vendor is 15% pretax, 7.5% after. What’s the typical hospital’s margin? In New Jersey, it’s negative. They pass the hat every year. Well-run shops like Columbia can eke out five percent. How much do you want to give to those poor people at Epic?

You ask to have negotiating session. In come six guys in suits, of which two or three are lawyers. Shake their hand and, they’ll have a caucus on who’ll shake hands and whether they’ll speak Latin or Greek. A wonderful CFO, Paul Long with Hunter Group, would see those lawyers and say, “I don’t have my lawyers. This meeting is over.”

We tell vendors, “Don’t bring your lawyers. We’re businessmen, and if you can’t explain it to us, we don’t want your systems because it will be normal human beings using it.” They want to choke the meeting to death and hope the hospital gives up and signs. The hospital is paying $300 or $400 an hour and they hope you’ll finally sign. Do 98% of the deal, then have a lawyer look over the clauses. If you can’t read and understand it, it’s a bad contract.

For response time, maybe the vendor has a three-page warranty. Rip it up and write it in one paragraph so that everyone can understand. Other than that, it’s legal gobbledygook. You don’t have lawyers on the nurse stations.

We were doing a very big deal in the Southeast. I got a nasty letter from VP of sales to my home address. I had told the client in front of them about trouble we’d had with that vendor in the past – response time, support, things like that. The letter said I was breaching my confidentiality agreement. I have no such agreement. That’s between them and their client. I took the letter to the hospital and showed them. They immediately chose the other vendor. Sometimes life works out like that and the good guy wins.

What hospital or IDN is the best IT showcase you can think of?

Hopkins in Baltimore. Stephanie Reel walks on water. It’s the most demanding job on Earth. She’s got 10 Nobel prize winners, 1,000 academics, and executives who know as much about IT as she does.

Meridian in New Jersey. Becky Weber, a former SMS installer, is CIO. She can make 20-year-old Invision look hot and blow people away when they come for a site visit. She beats up Siemens, but at the end of the day, she does good demos and gives good references.

Sisters of St. Francis. Bill Laker. He had high costs and unhappy users. We did an assessment and wrote a mean report. We said the users were unhappy and he was spending too much money. He went out, talked to users, and figured out they really were pretty unhappy. He looked at our numbers on staff comparisons. Two years of hard work later, he had turned it around, cut staff, cut costs, and improved satisfaction.

I’ll give you some vendor names and you give me some adjectives that come into your head. McKesson.

Interfarce. That’s a combination of integration and interface.

Cerner.

Stock price. Earnings per share.

Epic

Epic costs, with a small E. Very expensive, in other words.

QuadraMed.

Wonderful. Think reasonable cost. We get great contracts and reasonable service. It’s a pleasant surprise when you look under the covers.

Siemens.

They have the best plan of any IT vendor with Soarian. If they can deliver it, if they can code Soarian.PPT, they’ll own the industry. I don’t know how far they are.

Eclipsys.

Pleasant surprise. Nice tradition, that old Technicon tradition. A strong ethic of professionalism from Harvey, who did all the hard lifting at SMS. Nice to negotiate with. They try to deliver and don’t lie too much. They probably tell more truth than everyone. Mike Smeraski is golden if you can deal with him.

Misys.

Past tense. They’re gone. It’s a shame. That makes them the ultimate marketing company – they actually sold themselves.

Medsphere.

Fabulous VP in Frank Pecaitis. May be the best-kept secret in the industry. It’s a small hospital’s chance at an affordable system. exciting interfaces with MUMPS and Cache’, but compared to spending 10 or 20 million dollars that vendors want, that free license and reasonable maintenance could be the best-kept secret.

Meditech.

The army. It’s like a cult. If you believe, you’ll be happy. A lot of young kids out of Boston College. Prices have inched up, so it’s not the deal it used to be. The client server we call “lipstick on  a pig,” because you still get all the old Magic stuff. Everybody does what they’re told. They don’t negotiate. They’ve got almost a six- to nine-month line. They’re almost too successful. I wish they’d go public. I’d buy that stock.

You watched the industry grow up. Who in it has been most memorable?

There’s so many. So many fabulous people in the business.

I’d have to go back to my old buddy Pagnotta. He’s not that famous and he’s provincial. He lives in the northeast and doesn’t like to fly. He can sell screen doors on a submarine. If he wants you to have a typewriter, you’ll have one tomorrow and he’ll show up with ribbons and paper and make you so happy you’ll tell your neighbor, “You have to have one” and they’ll give up their word processor.

Dozens of characters have been stellar in this industry. The combination of selling, marketing, leadership, charisma, honesty, integrity, and morality – it’s so rare. You realize you have to live with these customers, not just rip everybody off and buy an island and be a hermit.

Early in my career, I was a sales exec like the scumbags I’m running down in this interview. I did it with a company that didn’t deliver the product. We sold stuff and it didn’t get delivered. I moved on another vendor, another vendor, then became a consultant. Three years ago, I went back to that same large multi-hospital IDN where I had sold a non-existent system 25 year before and they had lost all their millions. I started with the executives. The CEO, CMO – it was the people – they hadn’t moved. I had had a nice dark brown beard, but I had shaved it off. They started telling me about those terrible scumbags that sold them the nonexistent system that cost them millions. Sweat started running down my nose, but they didn’t recognize me. That’s the industry. I was a scumbag, and now I’m a consultant hero. We play different roles at different times in our careers.

You’ve been reading HIStalk for a long time. Give me the pitch you’d make to attract new readers and sponsors.

It’s more of the truth than anywhere else. You have the guts to put it in print than the mealy-mouthed magazines. They always edit out the name of the vendor and that destroys the article. You name names and tell the truth – that’s priceless.

Any last words?

Since I’m a consultant, I’ll advise readers to beware of them as well as vendors. Negotiate with them as strongly as with vendors. They’re getting a free ride, sometimes taking more millions than the vendor. Consultants should work for thousands of dollars, not millions, get projects done in months, not years, and work themselves out of a job and not stay forever and suck the place dry. Get your expert advice, thank them, and show them the door. Don’t let them become your partner and run the hospital for the next 10 years.

HIStalk Interviews Cindy Dullea, SVP of SCI Solutions and Rear Admiral (Select) of the United States Navy

I only knew Cindy Dullea as my sponsor contact at SCI Solutions. We swapped the occasional e-mail about advertising reports or graphics, that sort of thing.

Memorial Day of this year, I made my usual “fly your flag in honor of service men and women” pitch in HIStalk. Cindy e-mailed her thanks for that comment, confiding that she holds an additional role that she doesn’t talk much about. Cindy is Rear Admiral (Select) of the United States Navy.

Of course I had to interview someone that interesting and accomplished. Thanks to Cindy for agreeing to be interviewed (and for her service to our country, of course).

Let’s start with your civilian career. What do you do for SCI?

I am the senior vice president of marketing. I’d been with John Holton in the original 25 folks that started Scheduling.com in 1999 as VP of marketing. It was a great opportunity for me to create a brand and launch something from the ground up. I have an MBA with an emphasis in healthcare marketing and information systems. I had the opportunity to create the brand now known as SCI Solutions.

I left in 2002 and came back two years ago when John bought the Efileshare product. John and I had lunch together and it was a really great time to bring me back to re-brand the organization and figure out how to put the Scheduling.com product and Efileshare product names in perspective. We looked at that for seven months and re-launched about year ago.

I do all things marketing as well as being a nurse by background. I do a lot of client relations things, visiting clients and understanding how they use our systems, using my healthcare consulting background to see how they can improve their use of our product line.

What’s new with the company?

We have lots of new product functionalities coming out with Order Facilitator and our scheduling products. We had a record quarter last quarter in sales. Things keep getting better and better. We have wonderful ratings in KLAS. I couldn’t be more pleased, as I know John is, with progress of the company, from ratings to sales. We’re on a roll and have great momentum.

How does working for a relatively small HIT vendor compare with the big ones you’ve worked for?

It’s an opportunity to work, first and foremost, with some really bright people who have been around the company for awhile. In big companies, you get siloed and may not know what the division or department beside you is doing day to day. In a small company, you rely on each other. We’re all in it to make the company better. We’re high energy, multi-tasking types of individuals who are happy to step outside of our bounds to help the overall company and the individual departments meet our goals.

I like to multi-task and to be a part of multidisciplinary teams and high-energy team efforts. We can accomplish this by being very virtual. Of our 65 employees, over half are virtual, working from home offices. All our sales and marketing as well as implementation employees are home-based.

As a vendor marketing executive, how do independent blogs like HIStalk fit into the big picture?

We at SCI think it’s great because it gives us an unadulterated view of what going on in the industry. Most, if not all, of our executives read HIStalk. It gives us an idea of what the target market is thinking.

In the beginning when I came back, my group was focused on how to take the SCI Solutions brand and make it better to reintroduce it. We accomplished that in terms of creating marketing collateral and so forth to support the deployment of the new brand.

We switched over and said, “What are we doing for sales lately? How are we going to help our salespeople prospect better?“ It’s hard to fill your funnel and tool chest with qualified prospects to talk to. We said, “Where will we focus our marketing activities to help our sales organization?”

We became a prospect marketing organization. We looked at ways to do that and where to focus our advertising dollars. HIStalk was #1 on our list. That’s where the majority of the healthcare arena will get their information, not from reading trade journals. There’s no bang for the buck there.

We do Webinars, go to trade shows where buyers will be, and focus on getting clients out there speaking. We do a number of activities, but we advertise only in two places: HIStalk and on the NAHAM [National Association of Healthcare Access Management] website. That’s it.

You’re a board-certified informatics nurse. Is that a career path you’d recommend?

Absolutely. It has really caught on the past five years, especially among those nurses who have been at the bedside for 10+ years and can take their knowledge of how care is conducted to the information systems piece. It’s a great career path that’s catching on. CARING [a nurse informatics organization] is an organization that has grown tremendously.

Tell me about your military responsibilities.

I’ve been Navy nurse for over 27 years. I spent 3 ½ years on active duty as a full-time Navy nurse. I got off active duty, spent four years in the inactive Reserves, and have been a weekend warrior for the past 20 years.

I was just selected to be the next Navy Rear Admiral for the Reserve Nurse Corps. I’ll put on my star October 1. It was just confirmed by the Senate. It’s a done deal now [laughs]. I guess they found nothing bad in my background.

I’ll be over 4,000 Navy nurses, both active duty and reserve combined. I’ll be the #2 admiral over them. A two-star, full-time admiral is the #1. I will be there depending on the needs of the Navy. It could be up to 180 days a year on active duty. That’s one part of my Admiral job.

I’ve also just been named the Deputy Regional Commander for Navy Medicine National Capital Area. Navy Medicine is divided into four regions, each with a commander over Navy hospitals in their region. The National Capital area covers the National Navy Medical Center in Bethesda, Great Lakes Naval Hospital, and several others.

What are your responsibilities?

That’s unknown for me at this point. I believe it will have some level of governance over all components of Navy Medicine in the Capital region.

It will probably involve the integration of Walter Reed with Bethesda, which has lots of moving parts to think about. It’s no different than when two health systems merge. Beyond who has which toy and who does what, the cultures are different. It’s all military, but each component truly has their own culture, and with that comes small details. A Navy Corpsman is not the same as an Army Medic. Training is similar, but their patient care duties vary. How do you handle that on a patient care ward? You start going through the building blocks to bring the cultures together.

The Navy Surgeon General is the top doc, the top Navy person for Navy Medicine. The Surgeon General is a three-star Vice Admiral, the only three-star in Navy Medicine. I had the opportunity from 2000-2003 to command a unit at Navy Medicine headquarters that reported to the Navy Surgeon General. My unit worked with the strategy and goals of Navy Medicine. Everybody reports to the Surgeon General. I was probably closer because a lot of what we did was under the direction of the Surgeon General and his top team.

Is your military job affected by politics and bureaucracy?

Oh, yes [laughs]. Any time you get in a big organization, especially one that tries to stay apolitical, there’s always politics involved. Nothing happens with Navy Medicine unless it’s at the direction of someone pretty high up in politics. For example, we can’t just decide that we’re going to deploy a hospital ship when a tsunami hits. The Navy Surgeon General can’t just send out his big white ship. It has to come from Congress.

Do the armed forces do a good job taking care of soldiers?

Absolutely. There is nothing even comparable to the military’s ability to treat combat casualties. We’re seeing casualties in this war unlike anything we’ve seen in wars past. Service men and women who would have died in Vietnam and maybe Desert Storm I are living. We get to them quickly, stabilize them, and move them to Landstuhl, Germany. That’s great.

I think our challenge in the military arena – and probably Walter Reed has felt that more than other services – is post-critical time of care. One of the things we’ll get really good at doing is case management. What happens when you release that service man or woman from your facility back to their communities or bases? Each service does that continuity of care differently. Some hiccups have to occur. We’re learning from it. I’m convinced everybody knows that long-term case management has to be done very well.

You helped design the Navy Reserve’s personnel deployment system. How does it work?

It used to be that all reserve medical personnel came under the authority of big Navy Reserve, which owns every Navy Reservist. They were great at administratively taking care of us, but when it came to mobilizing us, they fell short because they didn’t understand the idiosyncrasies of physician and nurse specialties. You might be a med-surg nurse, OR nurse, or ICU nurse. You have to know what kind of nurse.

In 2000, the decision was made that the big Navy Reserve would pass over the day-to-day authority and operational control of Navy Reserve Medicine to the Navy Surgeon General, who would own his or her own assets, including reservists as well as activity duty. They had a better picture of what I call part-time staff, those several thousand reservists. We built MEDRUPMIS, which gave us the ability to drill down into fine detail about each reservist – corpsmen, nurses, doctors, dentists, and medical service corps. We could see not only what they were and their designator , but also see down to the granular detail, like the doctor is a board-certified orthopedic surgeon and is credentialed to practice.

We did a search query capability. You can pull up all med-surg nurses in a list of states and tell a military treatment facility like Bethesda how many med-surg nurses are in their area that they might be able to mobilize or have come in for their annual two weeks of training.

We were scheduled to do a Beta test scenario in which the hospital ship USNS Comfort was deploying for an emergency and we had to backfill Bethesda. I was there on September 11, 2001 as the senior officer, watching the screen as it matched requirements. The planes hit the towers and the Pentagon. What was supposed to be the Beta test became reality. We used the system, not knowing if would work to backfill 250 staff into Bethesda for staff deployed on Comfort to New York. Since then, it’s been used to mobilize for tsunamis and into military theaters around the world.

Having seen clinical information systems in both the military and private sector, how would you compare the two?

The commercial clinical systems are much better than what started out as CHCS I, created by SAIC and now AHLTA or CHCS II. I would say that some of our in-theater product lines are very good. Where the military is still lagging behind is in looking at those civilian systems and trying to understand, building on something that’s reached its life cycle, to see if there’s something out there. Systems aren’t building that EMR that we need to get to in the military. The case management aspect and knowing where service men and women are going will play into that.

What military leadership practices do you use in your job with SCI?

I absolutely give credit where credit is due. I wouldn’t be where I am today without the military. First and foremost, it’s understood early on the military that, as you move up into additional ranks, you are expected to take on increasing levels of responsibility. That taught me not to fear taking on bigger and better and more complex issues.

The military allowed me to lead not only small groups as a junior nurse over maybe 20 people, but up to 700 people over six states. It challenged me to think outside the box, to redefine my leadership skills, to try to not be afraid of trying different things and giving myself permission to fail.

I’ve taken those fundamental thought processes to SCI. John Holton lets me do that, strategizing what I want to do. In some ways, it’s very much like senior officers I’ve worked for in the military, using him as a sounding board. I enjoy that collaboration.

There’s much more organizational structure on the military side. Everything is extremely chain-of-command oriented. You wouldn’t pass over your immediate supervisor to get to someone else. When I come back from military duty, I have to think about which environment I’m in. I can be more relaxed and open about what I can say. I’ll use acronyms and John will tell me to stop [laughs].

You’ve known a lot of people in the industry. Which ones were most memorable?

I certainly would say, on the military side, I had opportunity to work for Vice Admiral Mike Cowan, who I understand is now CMO for BearingPoint. I learned a lot from his style. I’ve worked with John Holton twice, so there’s a testimonial there. Steven Russell from QuadraMed gave me my first break in the industry back in 1992 and hired me almost sight unseen, setting my path at Compucare for the first five years.

There have been lots of great people along the way who have allowed me to do different things. On the Navy side, Chip Rice, president of the Uniformed Services University. And, his chief of staff, Steve Henske, who was my commanding officer 12 or 13 years ago. I was selected as his #2 person, his Executive Officer, which began my leadership movement in Navy Medicine.

Any other thoughts?

I’d like to give a plug for any healthcare professional who has considered looking at a career with the military. For those who are patriotic, who want do something for our country, and who have the skill set, I’ll give a plug for the Navy Reserve.

For me, one of the most enjoyable things that I cherish over the last 20 years as an active reservist is the quality of the people I meet. Wherever I go, I’m in awe of the types of people who are out there and who set aside their lives for two days a month and two weeks a year to do something for the military. Some of them are health system CEOs or senior consultants or nurse anesthetists in business.

It’s incredible the kinds of folks I’ve had the chance to meet and get to know. If you’re looking for a new challenge, I would highly encourage you to consider service to your country. It’s a great opportunity and there’s a lot of self-satisfaction that can come with it.

I’m very blessed in that I’ve had the opportunity to have this alter-part of my life and able to maintain it, thanks to lots of folks who have supported me along with way on the HIS side. I’m blessed to be able to maintain both sides. I’m honored that SCI Solutions and its employees have been supportive. More importantly, when I speak with them, I feel there’s a lot of respect and a celebratory feel that it’s cool that I’m one of them. It’s like family at SCI.

HIStalk Interviews Michael McNeal, President and CEO of Emergin

Michael McNeal takes messaging seriously. Maybe you think of messaging as the mundane transmission of old fashioned analog signals from medical equipment, the boring stuff that only a screwdriver-wielding engineer could love. Michael and his company Emergin see messaging as strategic and mission-critical for hospitals. As a result, they’ve incorporated some cutting edge architecture and deployment ideas into their services for hospitals. It’s another formerly separate discipline that’s starting to look a lot like IT.

Hospitals buy a wide variety of message-capable equipment, often with little planning. That’s like cherry-picking favorite individual department IT systems with proprietary interfaces, with little regard to workflow changes, integration, impact on patient care, and optimization. That’s what Emergin addresses: architecture, deployment planning, and tying event notification and alarm management into strategic goals. Quite successfully, as it turns out, as the company is growing at a torrid pace after pretty much defining their own market segment.

HIStalk reader Art Vandelay mentioned Emergin in an article comment right after HIMSS, which is what put them on my radar in the first place. His description of their market is a lot better than I’d come up with, so here’s what Art said: “Emergin has a dynamic CEO and a great vision. If they’d only build a better biomedical data integration mousetrap – a la CapsuleTechnologie, they could set the world on-fire. Everyone in IT, the tsunami on the horizon is integration with biomedical devices and intelligent building technology (as opposed to letting these technologies persist on their own, poorly secured and sometimes poorly supported and utilized, with a few bridge-points spanning networks). It is time to hop into the boats and meet the wave rather than get over-run. We all want discrete data in our medical records systems, these devices generate more than you can imagine and it is a huge win with people who are in your hospitals more than the physicians. Emergin has a well-thought-out profile / use case for biomedical alert integration that should be in every mobile telecommunication and device request for proposal you put out. They also share their information in a brilliant guerilla marketing technique to entrench their product in the industry.”

Good intro, Art. Thanks for Michael for taking the time to chat and to Kathy McCall of Emergin for making the arrangements.

Tell me about the company and yourself.

Emergin was founded in 1995. The name derives from emergency and innovation. Since inception, our focus has been on emergency, real-time information as well as innovation, breaking new ground in new markets with a heavy emphasis on healthcare.

After graduating from the University of Florida as a computer scientist, I worked at IBM on operating system design. Above getting a comprehensive OS background, it helped me recognize the importance of governance structures in organizations, working on a team of up to 4,000 people architecting components into a single OS.

Hospital alarms used to be hard-wired, proprietary, standalone, and connected only to a desktop system or audio alert. How has that changed?

It really hasn’t changed. We’re hopeful that Emergin will be the driver of that change in healthcare. Most hospitals still buy monolithic, discrete systems. Phase II or III is workflow and optimization. We’re trying to get hospitals to think more strategically about planning and design. Healthcare hasn’t really changed that frequently.

We flew around the country over three years to really educate the hospitals on SOA and IT architecture in general, how they can be thinking differently about controlling their own destiny, focusing on work process design, human factors, and performance management.

We’re working strategically with customers, thought leaders like Texas Children’s, University of Chicago, Cedars Sinai, Memorial Sloan-Kettering, William Beaumont, New York Presbyterian, and Boston Medical Center. We need to work with them because it’s not one size fits all in the early innovation stages. We’re looking at alarm patterns, message discrimination, and improved patient safety.

The only problem is that there’s no category for Emergin [laughs]. We’re creating a market around of a category of alarm management that doesn’t exist in the US market.

The company has promoted and sold into a number of industries. Manufacturing, with Six Sigma and Lean. Aviation and the FAA. Government agencies like E911 for broadcasting of critical events. It’s the same business models being applied to healthcare market.

We researched the market six years when we decided to focus on healthcare. We realized that there were many discrete systems but nothing to orchestrate them all. Add on top of that the ability to create governance structures or committees or how to orchestrate nursing, IT, biomedical engineering.

How do you pull it all together into a master technology plan? You start out with a clean sheet of paper, a governance structure such as committees, and then build an architecture. Get representation from all departments to get everyone on the same page. Then, build around the hospital’s key strategies, like patient safety or financial performance. When departments and budgets are decentralized, departments choose their own technologies, which create fiefdoms. Then it becomes a battle to see who has the most power.

We’re taking it to next level, building IT architecture, mapping traditional alarm systems into medical architecture with a focus on workflow and performance management. I just received the initial alarm reports from Texas Children’s today. We’re assembling them to look at the rate of alarms on physiologic monitoring alarms, nurse call systems, IV pumps, and how effectively that info is being communicated to the nursing staff.

Do you have an example of what you do?

A example is William Beaumont. We visited their facility, then did an inventory of systems. We asked questions of IT about how they perform certain workflows. We put together a bunch of questions to ask care units to determine whether there was consistency in workflows. Often you’ll find that IT organization will claim that workflows are consistent until they do the research. We designed tools for them to collect the information and then give us the evidence of what’s happening. Hospitals also do research of individual systems, common nomenclature for bed labels, or staff classification or alarm categories.

What that uncovers is that they don’t really have a plan to drive the standards. They’re governed individually. Emergin created templates and tools to set standards and architecture to drive conformance over time. It’s easiest to go into new construction or renovation, but in many cases hospitals are retrofitting existing systems. When they realize how painful that is when there aren’t standards, they’re more apt to do it at the beginning of any new deployment.

Much of that isn’t tools, it’s a workshop. We meet for half a day with nursing and talk about workflows, care models, and response to alarms. Then, half a day with IT for education on service-oriented architecture  An issue that IT has is that they’re typically responding to capital equipment already purchased. Someone’s already bought physiologic monitoring and needs to get IT involved. When IT isn’t involved upfront, workflow changes aren’t uncovered until implementation. They may need network changes, interfaces, or workflow changes.

We’ve gone through 1,000 deployments with 200 best-in-class systems. Emergin has learned in six years how to do technology lifecycle management and change management. We understand that when you’re planning or designing your architecture and third party systems, you have lots of things to consider. Most hospitals won’t consider process flows from the beginning.

Maybe you’re sending an RFP for a nurse call system or IV pump system. Each monolithic system is being deployed. There’s no real consideration of workflow until afterward. All of a sudden, nurses are carrying four or five devices or entering the same data into three or four systems. That creates workflow challenges for nursing and frustrates them because they want to spend time at the bedside and technology makes it more difficult.

The next phase of electronic medical records seems to be the incorporation of digital device information. How does that fit in with your focus on alarms and events?

Most of the technologies are used to import information from data from medical equipment into EMRs for charting. Emergin’s value proposition is around messaging and notification, within five seconds for an emergency. Our core technology is the Emergin Enterprise Service Bus. For the mobile worker, which is 90% of caregivers, getting information is critical for patient care and safety. The EMR will collect info to record it as part of the patient record, but it’s traditionally a data repository for that information. Some EMRs can trigger rules or events, but not usually real time in five to 10 seconds.

What do you think of the work of IHE?

They’ve just created a medical device subcommittee of IHE. Some of our customers are part of it. They’re trying to drive some standards around how medical devices interface alarms and events. We were invited last week to help work on those standards.

IHE started on cardiology, pharmacy, and lab and is now expanding into the medical device domain, which we consider our core competence. Because we’ve integrated a lot of the medical equipment, we’ve created a standard integrated profile that we’d like to make publicly available. Some customers are including those specs in their RFPs. We’ve found that interoperability, not to overuse the term, is normally not considered until Phase II, III, or IV of a deployment cycle. We’re trying to coach hospitals to include it in the initial acquisition. Maybe not in the Phase I deployment, but interoperable by design.

Failure to rescue is an often overlooked phenomenon.

That’s the core area we’re focused on. We’ve done tremendous amounts of FMEA studies and are involved in clinical trials with medical equipment manufacturers. We’ve found that failure to rescue is often because of communication errors. We’ve built the ability to trace back on patient activity when the alarm was generated, who it was assigned to, which system, which device, who read it, who acknowledged it, and when the caregiver responded. By integrating with systems, we can produce an RCA transcript that can re-create life cycle of a patient alarm.

In the years of workshops, we were often asked about how long does it takes to do an RCA. It’s six to eight weeks with a reliability rate of 40%. 60% of the data was anecdotal. Hospitals couldn’t recreate the incident to avoid having it happen again.

I co-presented with Darren Dworkin, CIO of Cedars-Sinai, at HIMSS. A network engineer stood up in the audience and said he didn’t really understand the clinical domain, but said if he couldn’t find network problem or security breach within 15 minutes, he’d be out of a job. It takes six to eight weeks to find the cause of a patient’s death? That’s a great question. It’s a very interesting analogy.

Is alert fatigue and false alarming a problem?

Part of the Texas Children’s study is measuring the amount of false alarms. A key part isn’t just technology or relaying of an alarm, but looking at its impact on vigilance, what the fatigue lines are.

That’s another common workshop question: what’s the fatigue line for a 12-hour shift? No one could answer. Texas Children’s is writing an AHRQ grant for further research over three years. They’ll study the rate of alarms on a per-care-unit, per-patient basis. How many alarms can be physically handled during a shift? What’s considered an adequate staffing level to provide care?

Texas Children’s is also studying by system and by vendor and looking at trends. They recognize that, in a population of 12 patients, two patients generate over 80% of alarms. When you do staffing levels and look at what causes delays in response, which is unmeasurable in most hospitals, what is their average response time per patient? If they have two simultaneous alarms, what impact did that have on the second patient? You have to measure failure to rescue to determine response.

Hospitals struggle with throughput. What systems can improve that?

A Stanford graduate wrote about complex event processing. How do you know when certain things hit thresholds, like ED at capacity or census at capacity, and then do just-in-time management? Emergin is studying this as well. We started out with life-critical alarms — V-tach, asystole, or apnea —  and expanded beyond that to look at other critical events, such as critical lab results, getting them to caregiver, and having them call back receipt. As you’re looking at bed turnover and dirty beds, how do you streamline the overall operation to effectively respond?

When Emergin looks at an enterprise, we look at any input event and output event as discrete units, whether from physiologic monitors, nurse call or lab system, EMR rule, ED capacity alarm, or RFID alert if an infant leaves a certain zone, Emergin can take that data from discrete systems and take action on it, delivering it to whatever device is appropriate, such as a Cisco or Spectralink phone or Vocera badge. Some departments use LED signs in the hallways for real-time status updates. Doctors may have a RIM Blackberry, Treo, or cell phone that is their preferred device. How do you orchestrate these devices that carry events?

What are some creative uses of alarm systems in hospitals?

The pneumatic tube. If sample is sent and the tube gets stuck, it alerts the biomed department. Or, the Pyxis machine hits a threshold number of meds that need filled and only two pharmacists are working. We can alert the director of pharmacy to pull in more pharmacists to make sure they meet SLAs. Or the blood bank. If the temperature goes above or below thresholds, then notify maintenance. Customers generated these ideas.

How important is service-oriented architecture to your products?

We were hired by Motorola in 1996 to become the architect of their next generation platform called Heir Apparent. We’ve been SOA-driven since Day 1, a core messaging and notification engine with service adapters that became the interfaces to third party products. As the platform evolved, it enabled Emergin to continuously evolve and add more systems to its architecture without changing the foundational architecture over a 12-year period. We went from zero integrations to over 200 because we build a service model from Day 1.

There’s a lot of hype talking about SOA, but you’ll find that most companies that are doing it are in middleware, traditionally in logistics, financial services, and manufacturing. It hasn’t been applied well in healthcare. To build true SOA is to take a step back, study the inventory of systems acquired in a hospital over time, then build reference architecture, plugging systems into it, then looking for ways to increase operational efficiency.

SOA is a foreign concept to most hospitals. We’d ask, “Who’s the most important person when you build a house?” The joke answer was always the wife or general contractor. Often, no one thinks about the architect as the most important person, even though they build the plan and design. That ensures that when you build a bedroom or bathroom or kitchen that you’re using the same plumbing and electricity for economy of scale.

Think about the blueprint from Day 1. If hospitals step back and build an architecture, figure out how systems fit into it to ensure that you’re not buying the same components over and over. You’re able to leverage some of the systems that you’ve already purchased. When you have a core engine like an enterprise service bus, there’s certain user functionality that should be part of the core engine and not the individual systems you attach to it or you’ll duplicate job functions.

What involvement should CIOs have in alarm systems?

When we first kicked off the workshops, we thought our target audience was the CIO. We found that getting a CIO to spend an entire day to learn about SOA won’t happen. Later, we changed it to IT directors, biomed directors, and nurses moving into informatics. We fund that the IT director was the right audience, the right-hand technical gurus to the CIO. The CIO is more business-minded, with a holistic, vanilla operational focus. They don’t need to know details, they just need a team who knows details.

We found that when training directors of IT, they can translate language to the CIO and demonstrate the importance. We thought the CIO would be the strategic eyesight of the domain and would have to pull it all together, but we found that you have to speak different languages. Nurses don’t understand techno talk, but when you talk about care models and workflow and patient complaints, that’s what they related to. With IT or IS, we talk about networks and servers and databases and how systems interconnect. For biomed, it’s medical equipment, maintenance, and how they’re deployed and used. For facilities, it’s fire alarms, security, blood banks, and pneumatic tubes.

How do you get all those audiences with domain expertise on the same sheet of music? The workshop accomplished getting the group together for a common vision. SOA explains everyone’s responsibility for the architecture as it relates to their job functions.

Emergin was just named to the Healthcare Informatics 100 and one of Deloitte’s fastest growing technology companies. What are your goals going forward?

To continue accelerating our growth rate. We’ve had 70% to 75% for past three or four years and we’re still shooting for a triple-digit growth rate. We will probably hit closer to 80% this year. Those are ambitious goals. We’ve worked hard to build a market. We focus on customers. Doing the right thing has really helped us not only sustain the company, but build a solid brand recognition to set us up for phenomenal growth in years to come.

Most companies are happy with a 30 or 35% market share as a market leaders. We’re taking the Cisco approach. We don’t just want to be market leader, we want to set the standards.

As far as competition, there’s not much out there. We’re finally working with certain reporting organizations that are creating alarm and event management as a category for the first time. Joint Commission had written the effectiveness of alarm systems into one of their National Patient Safety Goals in 2006. Because there weren’t any vendors that could achieve those goals for hospitals, they removed it. We would suspect that after publicity from Texas Children’s and Beaumont, it could be written back into the charter and will fuel demand.

Your a technical guy. Are the skills you need to run a fast-growing company a lot different?

I’ve learned quite a bit on the job and I’m an avid reader. I’ve read about great companies, business leaders, strategies, leadership, marketing, and sales.

I’ve taken an interesting path from computer scientist to product manager, looking at business models and market segments for what we want to build, then putting the pieces together. My passion is getting more intimate with customers and leading sales and marketing initiatives for the company. It’s a unique transition for someone technical to grow into the business side.

Through the transition, I’ve recognized that hiring the right leaders, administration, and the engineering and services group really freed up my time to focus on sales and marketing. It allows me to spend every single week with customers.

When you look at personality types and skills, I’m a visual mathematician. I can take complex patterns and figure out formulas.

With the complexity of healthcare and the vendors in the ecosystem, we can help hospitals put a strategy together. The more you listen to customers and have them drive your roadmaps, the more successful you’ll be as vendor.