Health tech startup aiming for fences

Flying under the radar for much of its existence, local health tech startup hc1.com Inc. now thinks it’s ready to soar.

The company, spun out last year from Zionsville-based Bostech Corp., is on pace to generate annual revenue of $10 million by year's end. And it thinks business could triple next year.

That’s because hc1 is branching out from its focus on medical lab customers, and is now talking to radiology groups and institutional pharmacies. Signing up entire hospital systems is its ultimate goal.

Bostic

CEO Brad Bostic, who is better known for co-founding local search firm ChaCha Search Inc., said hc1’s software is key for giving doctors and health care executives the real-time data they need to meet the new demand in health care: better care at lower cost.

“You’re able to do a much better job focusing your resources,” said Bostic, 38, while drawing diagrams on a large whiteboard in his office on West 96th Street in Zionsville.

Focusing resources may well be the name of the game for health care providers in the future. They will be treating more patients as aging baby boomers require more health care and as Obamacare expands the number of non-seniors with health insurance.

At the same time, both public and private health plans are pushing health care providers into new kinds of contracts that reward them financially only when they keep patients healthier, reducing the amount of health care services they need.

The wide adoption of electronic medical record systems, spurred by incentives and penalties contained in the 2009 stimulus act, was supposed to help all health care players talk to one another. But hc1’s pitch is that few EMR systems or medical billing systems can easily produce a dashboard of key data that allows health care executives to manage their operations.

Hc1 is already being used in more than 500 health care facilities, and pulls data from more than 200 million health care transactions each year. It charges its customers a monthly fee for each person who accesses its software, which is run from cloud-based computers.

Hc1’s customers include Alere Toxicology, one of the nation’s largest operators of medical labs, and Tennessee-based HCA Inc., the nation’s largest chain of for-profit hospitals.

The company has more than 70 employees now and expects to reach 120 by the end of 2014. Bostic is optimistic in part because he bills hc1 as the first product to provide customer-relationship management specifically for health care customers. He estimates the total U.S. market for such tools at $8 billion annually.

And he thinks hc1 has a good amount of firepower to grab a bigger and bigger share of that market. The company has raised $14 million from angel investors.

“Now it’s starting to catch fire as this killer app for health care,” Bostic said.

Hc1 is working with Indianapolis-based Northwest Radiology Network to start its foray into imaging services. Northwest employs 50 physicians who read X-rays, CT scans and MRIs for 18 hospitals.

Linda Wilgus, Northwest Radiology’s chief financial officer, said she expects hc1 to give her information she needs to schedule physicians, so turnaround times on reading images don’t lengthen out, and on each physician’s speed and productivity at reading scans.

Hc1 is also setting up a system that will check all the orders Northwest Radiology receives for scans from physicians against appropriateness guidelines published by the American College of Radiology. If a doctor orders an MRI when a cheaper CT scan would work just as well, Wilgus will get a message on her computer, allowing her to call the ordering physician to see if he or she considered the lower-cost option.

Identifying unnecessary, duplicative or just overly intensive scans will help hospitals reduce their expenses for treating patients. It also could reduce Northwest Radiology’s reimbursements, but Wilgus is convinced that providing such quality-boosting and money-saving measures will be vital for Northwest Radiology to maintain the contracts it has with its many hospital partners.

“Data is going to be key to get to the changes we’re going to need to have the health system of the future,” she said.

Hc1 is able to make these data available for Wilgus by capturing all the orders and scheduling messages that Northwest Radiology’s computer systems already receive.

An ordering physician’s office alerts Northwest Radiology that it has requested a scan. Then it sends a scheduling message when it has settled on a time with the patient.

When the scan is conducted, most scanners send a message to Northwest Radiology when the scan begins and when it is finished. Finally, they send a note to tell Northwest Radiology’s physicians there is an image waiting for them to read and interpret.

The same kind of “e-prescribing” systems are already widely used in medical labs and pharmacies, which is why hc1 is targeting those companies, too. By adding long-term-care and home-health providers, Bostic thinks hc1 can produce comprehensive profiles of each patient a health system is caring for.

“All that data is just being squandered right now,” Bostic said.

Before implementing hc1’s software, Wilgus could get some data about physicians’ productivity, turnaround times and frequency of inappropriate tests. But it all came months in arrears, and it often took significant work to pull data from the many different computer systems used by various hospitals and combine it in one database.

“Today, I have to manage my practice in the rearview mirror,” Wilgus said.

Bostic is now in discussions with Florida-based Strategic Radiology Group, a national chain of radiology practices Northwest Radiology is part of, about deploying hc1 in all 16 of its practices across the country.

Another hc1.com customer is St. Vincent Seton Specialty Hospital, a subsidiary of Indianapolis-based St. Vincent Health. The long-term-care hospital worked with hc1 to develop its software, and it now uses it to track whether physicians are ordering too many lab tests.

Troy Reiff, the executive director of St. Vincent Seton, has his hc1.com dashboard set to report two things to him: any physician who is ordering more tests than his peer physicians are, and any patients whose lab results have been normal four times in a row.

If a physician is ordering more tests than is normal, Reiff said he tries to have a discussion with the doctor to understand the circumstances of his patient to see if all those tests are justified.

And if a patient’s test results are normal four times in a row, Reiff asks physicians to stop testing the patient so frequently. Reiff said it’s common for a patient to be tested frequently when he or she first arrives. But then those tests are repeated frequently—and unnecessarily—for the next several weeks while the patient recovers.

“They were being done even the day of discharge, even though they were normal four, five, six days prior to discharge,” Reiff said.

Reiff said he couldn’t get the same kind of information from St. Vincent’s other computer systems, unless he employed a team of people to pull the data, combine it into one database, then analyze it. And even then, it would be too old to affect patients currently in the hospital.

“Your EMR systems are not capable of extracting the lab system data and analyzing it like hc1.com is,” he said.•