We spend a lot of time here at OVP meeting with entrepreneurs determined to make the healthcare system more efficient and effective. For me, many of those meetings are somewhat abstract, as I choose to enter the healthcare system myself as infrequently as possible precisely because I find the system both inefficient and ineffective. Yet, as pain in my knee from an injury picked up playing soccer lingered, I decided to overcome my aversion for visits to the doctor and have it checked out. I have a friend who is an orthopedic surgeon, and he told me to call his office and they would squeeze me in. Thus began a long and enlightening journey through two different hospitals that provided a different level of insight to the confusing and convoluted world of providers and payors than is achievable reading healthcare IT business plans, blogs, and industry reports – and suggests that developers of such IT solutions should spend more time doing the same and building solutions with the end user in mind.
A few “highlights” (in the sense of amazement they generated) of the experience:
As someone who invests in healthcare IT solutions intended to directly address these very inefficiencies, the experience certainly validated the Osage Ventures belief that technology can revolutionize the healthcare industry. However, it also demonstrated how far those technology solutions have to go before truly having an impact. Current stats suggest that nearly 60% of physicians use an EMR system, up from just 30% in 2006, and the EMR market is expected to grow to $6.5 billion in 2012, a sixfold increase over 2009, on the surface implying the huge government incentives under ARRA are having their intended effect of driving a technology revolution in healthcare. Yet the almost universally disgruntled sentiment among physicians I have spoken with about their EMR experiences, all of whom have had a system foisted upon them as part of a rollout at a large hospital, suggests EMRs – and all of the other HIT breakthroughs they will enable once medical data is digitized – are a long way from delivering their promised benefits. The cost (estimates suggest the average EMR system costs $46,000 per physician to implement, which don’t include the three months of reduced patient loads and numerous headaches once the Epic rep is no longer there for handholding) and complexity of the systems that don’t easily fit into physician workflows are the most recently cited reasons for slow (or begrudging) EMR adoption.
These issues feel addressable by new innovators that can leverage the economics of the cloud to build a solution designed around the needs of the end users – physicians, nurses, their staff, and to a lesser extent patients. While we are wary of EMRs at OVP given the fits and starts of the industry, the huge number of providers (at last count it exceeded 400), and the increasing concentration among large players, we have seen many entrepreneurs who recognize the need to create physician-focused HIT solutions, while other prominent startups such as PracticeFusion and ZocDocs have grown quickly by taking a simple and user-centric approach. As just a few examples, we have recently met with several startups that are bringing gamification and social network approaches to the world of employee wellness, and others building solutions to allow physicians to access critical patient information on their own mobile devices using simple, intuitive – and very consumer-like – user interfaces. Our portfolio company Instamed is attempting to solve the real-time communication disconnect between payors, patients, and practices to avoid situations such as rejection of coverage after a custom-built knee brace is already produced and delivered. I hope these entrepreneurs succeed, and inspire others to do the same, as I really am tired of filling out the same form six times.
 CDC/NCHS National Ambulatory Medical Care Survey
 Frost & Sullivan, October, 2011