Just in case you didn’t realize there still is a world going on despite last week’s election. Back in health technology, a systemic change is happening as older client-server companies (like McKesson) retreat or open up their technology (Allscripts) while investors still believe that there’s a big market for SMAC technology and cloud-based systems to run the next generation of American health care. More evidence of that today with the news that CareCloud has raised another $31.5 million to double down on the already large bet placed on it by its investors as a platform for growing medical groups. I talked to CEO Ken Comee about the company, the state of the market, and what he expects to do with the money! — Matthew Holt
CareCloud CEO Albert Santalo Talks IPO and the EHR Market
Matthew Holt sat down with CareCloud President and CEO Albert Santalo to discuss the latest news from the Miami-based cloud practice management and EHR services provider. CareCloud got started in 2009 and since then has raised $55 million in angel and private venture funding and grown to 270 employees.
Currently, about 5,000 doctors use CareCloud for their practice management services with about a quarter of those doctors also using the CareCloud EHR. Santalo expects that number to grow to about 12,000 by the end of the year, explaining in three points why he thinks the market is primed for CareCloud’s cloud-based, integrated practice management and EHR system.
While Santalo’s grin says more than his answer when asked about a potential IPO, he shares some interesting thoughts on practice consolidation, meaningful use requirements, and the cloud in in-patient settings in this interview recorded at HIMSS last month.
Healthcare Needs a Quaking Aspen
For the majority of my career I have been obsessed with creating technologies to modernize our largely dysfunctional U.S. healthcare system. To me, it is very clear that the emergence of cloud computing has finally created the opportunity to truly address this daunting problem. Cloud-based solutions are the only viable option for effectively getting providers, patients and other key stakeholders online so that the necessary efficiencies find their way into the system.
To the rest of healthcare IT, however, it is not so clear, as witnessed by the lack of truly cloud-based companies in the marketplace.
Most of the large, established players in this industry continue to rely on the outdated client/server or older technologies, such as MUMPS. Some of these companies’ products trace their roots as far back as 1969. These companies and their software were built before the world wide web, before Facebook, the iPhone and iPad, salesforce.com – and even email, for God’s sake! There also exists a tremendous amount of confusion related to the morass of small, bootstrapped EMR companies, which number in the hundreds. People do not understand the difference between buying a monolithic single-purpose app to utilizing a robust, cloud-based platform approach.
This lack of understanding has made me realize that we need a better way to explain what the cloud has the power to do, and what true cloud-based technology even is. Easier said than done!
I was recently afforded a breakthrough, though unfortunately at the expense of an ancient treasure. Allow me to explain:
Todd Park Was Right…Now What?
In March of 2005, I staffed an interview between Todd Park and Steve Lohr of The New York Times in the cafeteria of the old New York offices of the “Grey Lady.” At the time, Park was heading a very small web-based start-up company that was trying to convince medical groups – and on that day, a leading national technology business reporter – that web-based “cloud” technologies would become mainstream in the healthcare IT industry and were the only logical means to get the hundreds of thousands of independent U.S. doctors and their small offices to go digital.
At the time, Lohr, one of the foremost technology reporters in the country covering IT giants like Microsoft, IBM and Intel, had just started covering Health IT upon the appointment of Dr. David Brailer as the nation’s first National Health Information Coordinator (or, as many called him back then, the “Health Information Czar”). In fact, Lohr had just gotten back from attending the annual HIMSS Conference in Dallas where he met with CEOs of “legacy” healthcare IT behemoths like IDX (now GE), Siemens, Cerner, Allscripts, McKesson and Epic.
In his first article addressing Health IT adoption in the U.S., Lohr touched on what he felt was the core challenge to achieving widespread EHR adoption: getting small medical practices to adopt and actually use these systems – something that had eluded the industry and those legacy IT vendors for many years. On the topic of getting small practices to adopt EHRs and the potential harm to the industry and the Bush Administration’s efforts if they didn’t, Dr. Brailer told Lohr, “The elephant in the living room in what we’re trying to do is the small physician practices. That’s the hardest problem, and it will bring this effort to its knees if we fail.”
Last week President Obama appointed Todd Park as the new Assistant to the President and U.S. Chief Technology Officer, with the responsibility to ensure the adoption of innovative technologies to support the Administration’s priorities including affordable health care. This got me to thinking.
Since taking office, President Obama has made some strong moves to champion the adoption of EHRs through the passing of the HITECH Act. This act, combined with the existing relaxation to the existing Stark anti-kickback laws, has actually enabled a spike in adoption of EHRs due to medical groups’ efforts to qualify for Meaningful Use dollars. But it has also had some unintended consequences that Mr. Park may now find himself in a unique position to rectify if he stays true to his support of cloud computing.Continue reading…
Trickle Down Health
Another year, another Health 2.0 under the belt. This being the fourth time attending it is interesting to see how this event and its participants have evolved. Like many things in life, some things at Health 2.0 have changed, some have not, most for the better, but there remain some troubling aspects to this event that cannot be ignored.
When thinking back on the demos of countless vendors of years’ past, this year’s Health 2.0 had two distinguishing characteristics:
Demos are cleaner, with better user interfaces (UI).
The companies demoing at Health 2.0 are spending a lot more time and resources on creating inviting, clean and engaging interfaces that are a welcome change from the cluttered messes of demos past.
As with Mark Twain’s famous quote: “I would have written you a shorter letter if I had the time.” reducing an application to its core elements takes time. Clearly, the majority of Health 2.0 vendors this year have spent the time and resources necessary to create a simple and engaging environment for the end user.
Business models are more sophisticated.
At the first Health 2.0 event, just about every single vendor there stated that their business model was going to be based on some mix of Freemium and advertising revenue. Needless to say, just about every Health 2.0 start-up from that conference has either gone out of business, is among the walking dead (takes a lot to completely kill a company – trust me, I’ve been there) or has changed their model to survive. This year, the business models presented are more creative and for some, likely to see success in the market.
The contributing factor to these two changes is the amount of money now flowing into the health IT sector. Investors smell opportunity and are placing some pretty big bets as represented by the investments in Castlight (~$80M), ZocDoc ($50M) and CareCloud, who announced a $20M round at the event. That’s some serious cash and with all the investors that were present at this event, quite sure there are more investments in the wings.
