A conversation with Tim Lantz, Sentry Data, Hal Daseking, GaussSoft, and Bradley Mossman, Convergence CT.

It’s a big moment in the healthcare industry for startup companies. Along with their industry incumbent counterparts, startups face top down directives requiring enhanced quality of care at lower costs. These supply requirements come at a time when the global demand for healthcare is outstripping economic growth, populations are expanding, and increases in the proportion of older people and the spread of chronic diseases bloat the system.

At the same time, expanding venture capital is opening up the market to new technologies that promise to upend the system, as illustrated by the 200 percent increase in VC healthcare capital infusion (Fortune). In addition, the proliferation of data made available through the Affordable Care Act’s stipulation to convert all free form text into machine readable data presents a vast opportunity for startups. The task at hand for these startups is how to provide better and more healthcare by leveraging large volumes of data generated by health systems.

Historically, the healthcare system was dominated by IT companies that oversaw scheduling and billing software as a reaction to patients scheduling appointments at the time they became ill. Today, the market has flipped this methodology on its head, prompting new ways that doctors can use data-informed discretion to make preemptive choices about what patients will require acute care or intervention before they think to call for care.

What’s more, as payment rates decrease and provider organization’s find their market share in flux, organizations will no longer be able to charge high prices without showing where costs are incurred. As this data rises to the surface, the US healthcare industry will start its migration from the current B2B model to B2c, moving towards consumer based care delivery that increases accountability and transparency.

The Inflection Point

The model of health is changing to one that improves care, cuts costs, and is transparent, thereby requiring the preemptive, efficient, coordination of healthcare to consumers.

Reimagining healthcare

Several startups in the program, Convergence CT, GaussSoft, and Sentry Data are playing incisive roles in transforming healthcare by delivering big data & analytics and finance solutions to the enterprise. As players at the forefront of innovation in healthcare market, they not only bring new solutions to large enterprise institutions, but also deliver key insights about how these institutions will be able to survive and thrive amidst rampant down-scaling and cuts.

ConvergenceCT

Convergence CT: Unifying data in disparate health systems and perform data exploration to improve population health

Bradley Mossman, Vice President of Convergence CT explains, “data is the savior of healthcare- when properly organized and used, health providers can use it to get information about whether patient best practices are followed, treatment efficacy in terms of quality and cost, and which resource investments are likely increase early detection of patient health”.

The challenge addressed by Convergence CT is in enabling diverse, isolated, and transactional data to answer these questions by unifying data from different systems and formats in order to use it in an analytic environment, while ensuring a large enough body of data is used to enable useful statistical analysis.

Current limitations in healthcare inhibit the full utilization of data. First, hospitals and physician groups generally care for patients in the single millions of patients range or less, and second, legal requirements stipulate patient privacy and confidentiality meaning that data is often not allowed to be aggregated outside of the source organization.

There are two main elements to Convergence CT’s solution that address disparate, protected data in health systems. The proprietary data model provides coherence to data at each of its locations while federated query technology allows data from multiple separate locations to be analyzed without moving the data out of its home location.

For current customers in the U.S., Convergence CT provides a means of analyzing data from all of their hospitals and other source systems in one, unified database.  By having the data available and ready for analysis, queries can be executed in a very short time as opposed the weeks and months that a traditional IT department request requires.  This enables users to respond quickly to requests for information, and with the underlying HANA system, to conduct data exploration on very large data sets with minimal to no delays.

gauss soft

GaussSoft: helping hospital CFO’s continuously improve their costs by productively exploiting all their existing financial and EHR data.

Hal Daseking of GaussSoft explains that the USA healthcare industry is undergoing a shift from a top-line volume (fee-for-service) to a bottom-line value (pay-for-value) focus. The consequences of this transition is that most large healthcare providers current managerial accounting and decision support tools which rely on average and aggregate costs for the thousands of procedures, services, facilities, labor and supplies become inadequate to manage the bottom line.

From existing healthcare provider financial and especially Electronic Health Records, EHR, GaussSoft’s products graphically models the natural flow of costs, capturing realistic margins that uncover cost improvements.

The figure below compares the current margin method (top graph) versus GaussSoft’s realistic margin (bottom graph) for 200 typical hospital procedures, represented as vertical lines. The current margin calculation based on averages (such as Relative Value Units, RVU) hides the realistic loss of 40 percent of the procedures, and is unable to precisely measure margins (off by typically 35 percent) making managing the bottom line difficult. Realistic costs uncover margin “leaks” that typically improve the bottom line by 30 percent.

gausssoft

Through more realistic costs hospital, GaussSoft allows CFOs to better manage their bottom line in real time. Uncovering these cost improvements has shown to improve the bottom line by 30 percent.

SENTRY DATA

Sentry Data

Timothy Lantz, SVP of Sentry Data describes the technology opportunity in healthcare as the ability to “deliver timely, relevant and actionable intelligence based on a robust, appropriately integrated compliment of data spanning costs, utilization, clinical outcomes, stakeholder experience, and financial performance”.  The access and manipulation of this information, he says “must be intuitive and highlight connections and interdependencies across stakeholder groups”.

Sentry’s focus in healthcare is the amalgamation and integration of complex healthcare cost and utilization data to support improved operational efficiency, quality, regulatory compliance and provider profitability.  The startup’s hospital and retail pharmacy management solutions have executed on this mission flawlessly over the past decade—yielding almost $3B in financial benefits for clients and earning them the KLAS category leader status in 2014.  The company’s newest solution suite has an even greater scope of healthcare provider data, leveraging Sentry’s proprietary comparative index of over 65 million patients and 500 thousand physicians nationwide.

DataNext automates the integration of relevant cost, utilization, quality, and revenue data for acute and post-acute healthcare providers.  From there, the system begins to ask questions of the data in order to yield specific improvement opportunities related to cost savings, revenue enhancement, and variability reduction.  The system ties these identified opportunities to a combination of automated and manual workflows so that the users can efficiently act upon them in order to capture the associated benefit.  Lastly, DataNext automatically measures the financial impact of the interventions that have been taken, on a going-forward basis, so that clients can directly link their activities and the activities of the system to real dollar savings and increased revenues.

The thought evolution and business value are both tied to three key aspects of Data Sentry’s system capabilities:

1. Assembly of a single source of truth in the form of Sentry’s longitudinal patient record

2. The integration of cost and revenue data at the episodic level via actual patient utilization

3. The ability of DataNext to automate analysis in near real-time across the compliment of an organizations disparate HIT systems.

Looking forward

Tim Lantz of Sentry Data pictures the future of healthcare as functioning much differently than it  today, “with the rate of mergers and acquisitions of health institutions multiplying each year, the resulting mega systems will necessitate intelligence management platforms that are able to perform at new levels as providers, payers, and patients continue to evolve and tackle the emerging intricacies of population health- inciting the constant evolution of Sentry Data’s DataNext platform over the next 5, 10, and 20 years”.

Part of this future will be the realization by health institutions about the imperative of Big Data, says Brad Mossman, “the industry will see the value of making use of the larger amount of data available to provide more useful insights to the treatment and management of specific disease populations”.

Within this paradigm shift, consumers will come to the forefront as major players, empowered by easily accessible data about their health quotient and the breakdown of treatment cost. The “B2c” model- the little c for consumer, describes Hal Daseking- will steer health systems towards greater transparency and accountability that improve overall population health.

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