CEO Interview: MEDecision zeroes in on the e-healthcare megatrend
Posted by: in Goog newsFiled under: Google (GOOG), Microsoft (MSFT), Interviews
MEDecision, Inc. (Nasdaq: MEDE) got its start in the late 1980s and has since built a broad offering of technologies for clinical data. In fact, the company’s customers manage healthcare for one in every six insured Americans.
I had a chance to interview David St.Clair, who is the founder and CEO of the company.
It seems that your company has a big long-term opportunity. What are some of the driving trends in your sector?
Clinical data exchange is by far the greatest driving trend right now both for the health care system in general and for MEDecision in particular. For health care, clinical data exchange can improve care quality, increase patient safety, reduce errors and, generally, make care more affordable. There is a general belief - and some studies to support it - that a higher quality of care in this sense translates to more affordable care.
What’s driving our company is the belief that insurers and other payer organizations will be the primary financial beneficiaries of that care improvement and so care management has become a greater priority for them. They’re looking to gain a competitive advantage through care management. The Gartner Group recently published a study indicating that care management is the number three concern for employers. So from a system and process perspective their number one priority is impacting care management and that plays nicely into MEDecision’s future because we have experience and know-how to work with our customers and help them deliver the kind of care management programs their customers want to see. Traditionally, the focus has been on insurance premiums and cost, but now the more astute employers realize that it’s not just how much you pay for the insurance, it’s the effect that the care management programs respective insurers bring to the table have on employee absenteeism and presenteeism. Employers are willing to pay more in premiums to have healthier employee populations, so care management becomes a very key competitive issue for insurers.
It’s been tough for healthcare IPOs and Medecision has had troubles too. What are some of the strategies to get the attention of the Street?
I would say that we have the market’s attention, now what we have to do is prove that we deserve it. Many investors recognize the long term opportunity with MEDecision and realize that we are ideally positioned to take advantage of that. We’ve been trying to put ourselves in just this position for 19 years. Investors realize our thought leadership and the opportunity that our large customers present for us. Now we have to execute. We have to get better operational control over our sales process, increase margins and show the adoption of clinical data exchange.
Microsoft Corporation (Nasdaq: MSFT) has announced an electronic record system and Google, Inc. (Nasdaq: GOOG) is making moves in the space too. Your take on these initiatives?
There are a couple of different ways to look at this…
From our perspective, the large insurance companies’ best strategy for engaging their members in their own health care relies on a multi-faceted approach that says they must meet their members where their members want to meet them. In other words, to a great extent, payers can’t have just a member portal, for example, as their sole strategy for connecting with their members. They have to be able to reach out to their members by way of third parties: Microsoft, Google, Dossia, and any other number of other players who are all trying to innovate to get consumers’ attention. There is no clear winner and will not be for many years because the technology to truly engage consumers in their own health care hasn’t been invented yet. Right now, our customers have to be prepared to connect to their members through a multiplicity of applications. Our job is to make sure we can connect our customers’ data and message to their members through Google, Microsoft, WebMD and so on.
The other part of this discussion has to do with opt-in and opt-out. What Google, Microsoft, Dossia, etc., have in common is that they’re fighting to engage consumers who have already agreed to engage. Theirs is, by definition, an opt-in strategy. They say, in effect, “If you think you want to engage in your health care, you can come to us and we’ll give you some tools to help you do it.” The problem is that, right now the number of Americans who actually do that is infinitesimally small. That will now, in and of itself, not have a profound impact on the health care system in the near future. What will is the ability to take pieces of data that are already electronically available and deliver them to the point of care for all those patients who are not engaged - essentially protecting them from their unwillingness to engage. In other words, when someone who is really sick but has not gone to a website to volunteer certain health information shows up in the ER, we’ll have data for them anyway. Just as an insurance company is meant to insure you on the financial side, they can also protect you by providing your doctor with the information they need to make you safer and your care better. At some time in the distant future there may be a greater percentage of people willing to actively manage their health care online. In the meantime you have these behemoths like Google and Microsoft fighting over the small percentage of Americans who are engaged. We feel that’s a fine battle, but not one we’re interested in becoming involved in.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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