Star­tups learn from hospi­tal in­vestors

Modern Healthcare - - BEST PRACTICES - By Dave Barkholz

Carm Hun­tress says he’s happy for the tens of thou­sands of dol­lars that UCHealth has in­vested in his startup soft­ware com­pany, which of­fers physi­cians point-of-care pre­scrib­ing guid­ance.

But beyond fi­nanc­ing growth, the Colorado-based sys­tem’s part­ner­ship has pro­vided RxRevu de­vel­op­ers with in­valu­able feed­back from the front­line emer­gency room physi­cians who use the soft­ware, Hun­tress said. And that’s in­creased the startup’s credibility among cus­tomers both cur­rent and po­ten­tial.

“It’s been a real point of val­i­da­tion,” Hun­tress said of the two-year part­ner­ship.

Across the coun­try, emerg­ing health tech­nol­ogy com­pa­nies like RxRevu, Bi­nary Foun­tain and Augmedix are find­ing it ben­e­fi­cial to hitch their wag­ons, at least in part, to hospi­tal ven­ture cap­i­tal funds.

More health sys­tems are start­ing ven­ture cap­i­tal funds fo­cused on health­care after see­ing the re­turns en­joyed over the years by pi­o­neers such as As­cen­sion, Dig­nity Health and Cleve­land Clinic, said Derek Baird, vice pres­i­dent at Chicago-based Avia, a na­tional net­work of health sys­tem in­no­va­tors that it­self re­ceives ven­ture cap­i­tal from health sys­tems.

Con­versely, tech com­pa­nies in­creas­ingly are tap­ping into the cap­i­tal, ex­per­tise and con­nec­tions that these hospi­tal-spon­sored funds can bring, Baird said. “We’re see­ing even mid­sized re­gional health sys­tems start eight- to nine-fig­ure ven­ture cap­i­tal funds.”

Over each of the past three years, ven­ture cap­i­tal fund­ing of dig­i­tal health com­pa­nies ex­ceeded $4 bil­lion, ac­cord­ing to a re­cent study by Rock Health. The data show that more ven­ture in­vest­ment went into dig­i­tal health firms dur­ing the first month of 2016 than all of 2011.

UCHealth con­trib­uted a chunk of the nearly $4.7 mil­lion RxRevu has raised since early 2014. Den­ver-based RxRevu’s soft­ware helps busy clin­i­cians pick the right pre­scrip­tion for pa­tients.

It got its first trial in the emer­gency depart­ment of the Univer­sity of Colorado Hospi­tal in early 2016, Hun­tress said. Sit­ting side-by-side with clin­i­cians and staff, RxRevu staffers worked for months mas­sag­ing the soft­ware so that the med­i­ca­tion in­for­ma­tion it yielded could be ob­tained read­ily as part of the ER work­flow.

Hav­ing that access was in­valu­able and only pos­si­ble be­cause the hospi­tal made it a pri­or­ity. “We need that tightknit col­lab­o­ra­tion,” Hun­tress said. UCHealth par­tic­i­pated in RxRevu’s first fund­ing, which raised $540,000 in 2014, as well as some of the other four.

The RxRevu soft­ware was first used for pre­scrib­ing an­tibi­otics, said Dr. Richard Zane, chair­man of the emer­gency medicine depart­ment for UCHealth’s seven hos­pi­tals and 22 other ERs scat­tered over 100 am­bu­la­tory lo­ca­tions in Colorado, south­ern Wy­oming and west­ern Ne­braska. Physi­cians took to the tech­nol­ogy and now the sys­tem wants to get all drugs pre­scribed in the ER built into the soft­ware, Zane said. Then UCHealth wants to of­fer it in all its ERs.

Zane un­der­scored the word “of­fer”; emer­gency physi­cians don’t have to use it. Yet since the soft­ware in­stal­la­tion, ad­her­ence to rec­om­mended guide­lines for spe­cific an­tibi­otic use has jumped from 45% to 65%, Zane said.

Augmedix has grown quickly by hav­ing such large health sys­tems as Dig­nity Health and Sut­ter Health among its big­gest in­vestors, said Pelu Tran, pres­i­dent and co-founder of the tech­nol­o­gyen­abled med­i­cal tran­scrip­tion busi­ness. Since 2013, Augmedix has raised $60 mil­lion in ven­ture fund­ing.

Augmedix saves its in­di­vid­ual physi­cian users 15 hours per week on clin­i­cal data en­try sim­ply by wear­ing Google Glass to record pa­tient vis­its. An Augmedix em­ployee re­motely in­puts the data into the of­fice’s elec­tronic health record sys­tem in real time.

That gives physi­cians more time to spend with pa­tients. What’s more, the real-time tran­scrip­tions are more ac­cu­rate since the physi­cian doesn’t have to go back later and try to re­mem­ber ex­actly what was said, Tran said.

With big health sys­tems fund­ing the com­pany and cham­pi­oning its ser­vices at their fa­cil­i­ties, Augmedix has grown to 1,000 em­ploy­ees world­wide, with 200 in the U.S.

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